Which of the Following Is Not a Difficulty Concerning Beta

question 87

Multiple Choice

Which of the following is not a difficulty concerning beta and its estimation?

• A) Sometimes a security or project does not have a past history which can be used as a basis for calculating beta.
• B) Sometimes,during a period when the company is undergoing a change such as toward more leverage or riskier assets,the calculated beta will be drastically different than the "true" or "expected future" beta.
• C) The beta of an "average stock," or "the market," can change over time,sometimes drastically.
• D) Sometimes the past data used to calculate beta do not reflect the likely risk of the firm for the future because conditions have changed.
• E) All of the above are potentially serious difficulties.

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Definitions:

Molecular Formulas

A notation that shows the type and number of atoms in a molecule but not the bonds or arrangement, such as C2H5OH for ethanol.

Elements of Unsaturation

Refers to the presence of double or triple bonds and/or rings in a compound, which reduce the total number of hydrogen atoms the compound can contain.

Molecular Formula

The symbolic representation of the types and numbers of atoms in a molecule.

Carbon-Carbon Bond Length

The distance between the nuclei of two carbon atoms linked by a chemical bond in a molecule.