Investors Should Recognize That Betas Are Calculated Using Historical Data

question 41

True/False

Investors should recognize that betas are calculated using historical data and that past performance relative to the market average may not accurately predict future performance.

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Definitions:

Full Disclosure

The practice of revealing all relevant information or facts, particularly those that may influence a decision or outcome.

Guiding Principles

Fundamental norms, rules, or values that represent what is desirable and positive for a person, group, organization, or community, and help it in determining the rightfulness or wrongfulness of its actions.

Systematic Inquiry

A structured and methodical approach to investigating questions or problems to generate knowledge.

American Evaluation Association

A professional organization dedicated to improving evaluation practices and methods, enhancing evaluation use, and supporting the contribution of evaluation to the generation of theory and knowledge about effective human action.