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:

Real Output

The measure of goods and services produced in an economy, adjusted for inflation, reflecting the actual value of goods and services.

Money Supply

The total amount of monetary assets available in an economy at a given time.

Prolonged Inflation

An extended period of time during which prices in an economy consistently rise, diminishing purchasing power.

Monetarist

An economist who believes that variations in the money supply have major influences on national output in the short run and the price level over longer periods.