The Systematic Response Coefficient for Productivity,β_p,would Produce an Unexpected Change

question 31

Multiple Choice

The systematic response coefficient for productivity,β_p,would produce an unexpected change in any security return of ____ β_P if the expected rate of productivity was 1.5% and the actual rate was 2.25%.

• A) 0.75%
• B) -0.75%
• C) 2.25%
• D) -2.25%
• E) 1.5%

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Definitions:

Annually Compounded

Pertaining to interest on investment or loans that is calculated once a year, adding to the sum each year.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, often used as an indicator of inflation.

Real Rate Of Return

The annual percentage profit earned on an investment, adjusted for changes in the price level due to inflation.

Annually Compounded

Interest on an investment or loan calculated once per year, including interest on the initial amount and all previously accumulated interest.