A Proxy Beta Is

question 84

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 the options are correct.

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Definitions:

Alternate-form Reliability

Refers to a measure's reliability assessed by comparing different versions of the test that are created to be equivalent.

Test-retest Reliability

A measure of consistency where the same test is administered to the same group at two different points in time to assess its stability over time.

Predictive Validity

The extent to which a score on a scale or test predicts scores on some criterion measure.

Typology

A systematic classification or study of types that shares common characteristics.