If a Firm's Beta Was Calculated as 1

question 42

Multiple Choice

If a firm's beta was calculated as 1.3 in a regression equation, a commonly-used adjustment technique would provide an adjusted beta of

• A) less than 1.0 but greater than zero.
• B) between 0.3 and 0.9.
• C) between 1.0 and 1.3.
• D) greater than 1.3.
• E) zero or less.

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Definitions:

Shift

A change in position or direction, often used in economics to describe a movement in supply or demand curves in response to external factors.

Electronic Components

Components such as resistors, capacitors, diodes, and transistors used in the creation of electronic circuits.

Relatively Elastic

Refers to a situation where the quantity demanded or supplied of a good changes significantly in response to changes in price.

Percentage Increase

calculates the rate at which a quantity grows over a period, expressed as a fraction of its original value.