Question

Carry out calculations to at least 4 decimal places. Enter percentages as whole numbers. Example: 3.03% should be entered as 3.03. Do not include commas or dollar signs in numerical answers.

D Question 8 2 pts If a firm's beta was calculated as 1.3 in a regression equation, a commonly used adjustment technique would provide an adjusted beta of greater than 1.3 less than 1.0 but greater than zero. between 1.0 and 1.3 O zero or less. O between 0.3 and 0.9

Answer 1

c). between 1.0 and 1.3

Explanation: Betas, on average, equal one; thus, betas over time regress toward the mean, or 1. Therefore, if historic betas are greater than 1, adjusted betas are between 1 and the calculated beta.