Which of the Following Is NOT Considered to Be an Important

question 32

Multiple Choice

Which of the following is NOT considered to be an important choice when estimating beta?

• A)The choice of the time horizon to use for estimation
• B)The choice of method used to extrapolate beta
• C)The choice between weekly and monthly returns
• D)The choice of index used as the market portfolio

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Definitions:

Standard Deviation

A measure of the dispersion or spread of a set of data points relative to its mean, used in statistics to quantify variability.

Efficient Market

A market theory suggesting that asset prices fully reflect all available information, making it impossible to consistently achieve higher returns.

Prices

The sum of money anticipated, needed, or provided as compensation for something.

New Information

Fresh data or insights that have not been previously available or considered, commonly impacting financial markets and investment decisions.