Discuss Possible Bias Inherent in Estimating the True Beta Value

question 7

Essay

Discuss possible bias inherent in estimating the true Beta value according to Lintner and Douglas.What are the findings of Miller and Scholes on the basis of this evaluation?

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Definitions:

Shifting Mix

Changing the combination or proportion of elements within a group, portfolio, or formula to achieve a desired outcome or balance.

Broad Purpose

A wide-ranging or general aim that an organization or individual seeks to achieve, often encompassing various specific objectives.

Goods

Tangible products that are produced, bought, or sold, thereby contributing to an economy's exchange of value.

Services

Activities or benefits provided by one party to another which are intangible and do not result in ownership.