A Proxy Beta Is

question 89

Multiple Choice

A proxy beta is:

• A)the average beta of firms that are only engaged in the proposed new line of business.
• B)the industry average beta that is used in lieu of the firm's beta because the firm has not existed long enough to have a beta calculated.
• C)the beta used when the firm has a great deal of business risk.
• D)None of these answers is correct.

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