Given the Following Information,determine Which Beta Coefficient for Stock a Is

question 100

Multiple Choice

Given the following information,determine which beta coefficient for Stock A is consistent with equilibrium: E(k_i) = 8.5%; k_F = 4%; E(k_M) = 12%.

• A) 0.80
• B) 1.26
• C) 0.56
• D) 1.10
• E) 1.00

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Definitions:

Unbiased Consistent Estimator

A statistical estimator that accurately targets the parameter of interest in the population and whose accuracy increases as the sample size increases.

Population Proportions

The fraction or percentage of the total number of individuals in a population that share a particular characteristic.

Pooled Proportion Estimate

A method for estimating the proportion of an entire population by combining the proportions from different samples.

Null Hypothesis

An initial assumption stating there is no meaningful difference or impact, serving as the basis for statistical analysis.