Based on the Following Information,make an Estimate of the Stock's

question 36

Multiple Choice

Based on the following information,make an estimate of the stock's beta: Month 1 = Stock +1.5%,Market +1.1%; Month 2 = Stock +2.0%,Market +1.4%; Month 3 = Stock -2.5%,Market -2.0%.

• A) Beta is greater than 1.0.
• B) Beta is less than 1.0.
• C) Beta equals 1.0.
• D) There is no consistent pattern of returns.

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Definitions:

Reliability

The degree to which an assessment tool produces stable and consistent results across multiple measurements.

Validity

The extent to which a test or instrument measures what it is supposed to measure.

Predictive Validity

The extent to which a score on a scale or test predicts future performance on a related outcome.

Culture Bias

The tendency to interpret or judge phenomena by standards inherent to one's own culture, potentially leading to misunderstanding or prejudice.