The Beta of a Stock Has Been Estimated as 1

question 47

Multiple Choice

The beta of a stock has been estimated as 1.8 using regression analysis on a sample of historical returns. A commonly-used adjustment technique would provide an adjusted beta of

• A) 1.20.
• B) 1.53.
• C) 1.13.
• D) 1.0.

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Definitions:

Arthritis

A condition characterized by inflammation of the joints, causing pain and stiffness that typically worsens with age.

Adrenal Glands

Small glands located on top of each kidney that produce various hormones including adrenaline and cortisol, which help control blood sugar, burn protein and fat, react to stressors, and regulate blood pressure.

Stress Hormones

Chemical substances released into the body in response to perceived threats, which prepare the body for fight or flight, including cortisol and adrenaline.

Lymphocytes

Type of white blood cells that are an integral part of the immune system, involved in protecting the body against both infectious disease and foreign invaders.