Suppose the Following Equation Best Describes the Evolution of β

question 68

Multiple Choice

Suppose the following equation best describes the evolution of β over time:β_t = 0.30 + 0.70β_t − ₁If a stock had a β of 0.82 last year, you would forecast the β to be _______ in the coming year.

• A) 0.91
• B) 0.77
• C) 0.63
• D) 0.87

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Definitions:

Pearson's Correlations

A measure of the linear correlation between two variables, giving a value between -1 and 1.

Chronic Diseases

Long-lasting health conditions that can be controlled but not cured.

Hispanic Populations

Groups of individuals residing in a given area that identify with, or are descended from, Spanish-speaking cultures.

Pearson's Correlations

A measure of the linear correlation between two variables, ranging from -1 to 1.