Suppose the Following Equation Best Describes the Evolution of β

question 32

Multiple Choice

Suppose the following equation best describes the evolution of β over time: β_t = 0.3 + 0.2β_{t - 1}
If a stock had a β of 0.8 last year, you would forecast the β to be _______ in the coming year.

• A) 0.46
• B) 0.60
• C) 0.70
• D) 0.94

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Definitions:

1863

A significant year during the American Civil War marked by the Emancipation Proclamation, which declared the freedom of slaves within the Confederacy.

Northern Victory

Northern Victory refers to the triumph of the Union (northern states) over the Confederacy (southern states) in the American Civil War, leading to the preservation of the United States and the end of slavery.

Civil War

A war between citizens of the same country or state, often to achieve political independence or change governmental policies.

Major Factors

Essential elements or determinants that play a significant role in influencing or deciding the outcome of a particular situation or in the analysis of a problem.