An Analyst Computes a Beta Coefficient with a Low Standard

question 37

Multiple Choice

An analyst computes a beta coefficient with a low standard error. This implies that

• A)this particular beta is more reliable than most.
• B)this particular beta has little meaning.
• C)too few observations were used to compute this particular beta.
• D)this stock responds less to market changes than most stocks.

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Definitions:

Compounded Semi-annually

A method of calculating interest where the interest is added to the principal amount twice a year, resulting in the accumulation of interest on interest over the period.

Business Bank Loan

A specific type of loan intended for business expenditures, provided by a bank to a company, with agreed repayment terms and interest rates.

Compounded Semi-annually

A method where interest earnings are calculated and added to an account's balance every six months, contributing to the compounded growth of an investment.

Compounded Quarterly

Related to the calculation of interest which is added to the principal amount at the end of every quarter, or every three months.