Suppose the Following Equation Best Describes the Evolution of β

question 1

Multiple Choice

Suppose the following equation best describes the evolution of β over time: β_t = 0.25 + 0.75β_{t - 1}.
If a stock had a β of 0.6 last year, you would forecast the β to be _______ in the coming year.

• A) 0.45
• B) 0.60
• C) 0.70
• D) 0.75

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Definitions:

Conduction

The direct transfer of heat or electricity through a substance when there is a temperature or electrical potential difference.

Thermal Energy

The internal energy present in a system due to the motion of its atoms or molecules, often perceived as heat.

Felsic Magma

Magma that is high in silica and light in color, typically associated with explosive volcanic eruptions.

Intermediate-Composition

Refers to igneous rocks with a silica content between mafic and felsic rocks, often associated with volcanic activity.