The Beta of a Stock Has Been Estimated as 1

question 32

Multiple Choice

The beta of a stock has been estimated as 1.4 using regression analysis on a sample of historical returns. A commonly-used adjustment technique would provide an adjusted beta of

• A) 1.27.
• B) 1.32.
• C) 1.13.
• D) 1.0.

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Definitions:

Activity Variance

The difference between the expected performance or cost of an activity and its actual performance or cost, used for budgetary control and operational improvements.

Other Expenses

Costs not directly related to core business operations, such as interest payments or losses from asset sales.

Budgeting

The process of creating a plan to spend your money, helping to ensure that enough money is available for the things you need and the goals you want to achieve.

Travel Expenses

Costs associated with travel for business purposes, including transportation, accommodation, meals, and related items.