Given the Following Returns on Stock Q and "The Market

question 6

Multiple Choice

Given the following returns on Stock Q and "the market" during the last three years, what is the difference in the calculated beta coefficient of Stock Q when Year 1 and Year 2 data are used as compared to Year 2 and Year 3 data? (Hint: Think rise over run.)

• A) 9.17
• B) 9.63
• C) 10.11
• D) 10.62
• E) 11.15

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Definitions:

Laissez Fair Capitalism

An economic system where private parties are free from government intervention in their economic decisions.

Monopolistic Competition

The market structure that exists when there are fewer businesses than in a pure-competition environment and the differences among the goods they sell are small.