Given the Following Information,determine Which Beta Coefficient for Stock a Is

question 28

Multiple Choice

Given the following information,determine which beta coefficient for Stock A is consistent with equilibrium: r_s = 11.3%;r_RF = 5%;r_M = 10%

• A) 0.86
• B) 1.26
• C) 1.10
• D) 0.80
• E) 1.35

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Definitions:

Null Hypothesis

A basic assumption or statement that there is no effect or no difference, used as a starting point for statistical testing.

Sample Proportions

The fraction or percentage of sample units that exhibit a particular trait or characteristic.

Population Proportions

A measure of the fraction of the total population that falls into a specific category.

Unbiased Consistent Estimator

A statistical estimator that accurately targets the parameter of interest in the population and whose accuracy increases as the sample size increases.