If a Firm's Beta Was Calculated as 1

question 46

Multiple Choice

If a firm's beta was calculated as 1.35 in a regression equation, a commonly-used adjustment technique would provide an adjusted beta of

• A) equal to 1.35.
• B) between 0.0 and 1.0.
• C) between 1.0 and 1.35.
• D) greater than 1.35.
• E) zero or less.

---

Definitions:

Joint Bank Account

A bank account held by two or more individuals, where each account holder has equal access and rights to the funds.

Remaindermen

Individuals who have a future interest in property after the end of a life estate or other particular interest.

Income Beneficiaries

Individuals or entities entitled to receive income generated from a trust, estate, or other financial product.

Operation of Law

Changes in rights or obligations occurring automatically due to existing legal rules, without the need for action by the parties involved.