Betas of Individual Securities Are Unstable Over Time

question 74

Essay

Betas of individual securities are unstable over time. What are some characteristics that could cause a company's beta to change over time?

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Definitions:

Additional Accounts

Extra accounts or financial records set up for tracking specific transactions separate from the primary account.

Workers' Compensation

A form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue their employer.

Premises Rule

A legal principle that holds property owners and occupiers liable for injuries that occur on their property, under certain conditions.

Business Trip

A journey taken for work or professional reasons, often involving travel outside the usual workplace.