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Suppose the Following Equation Best Describes the Evolution Of β\beta Over Time

Question 3

Multiple Choice

Suppose the following equation best describes the evolution of β\beta over time: β\beta t = 0.18 + 0.63 β\beta t - 1.
If a stock had a β\beta of 1.09 last year, you would forecast the β\beta to be _______ in the coming year.


A) 0.87
B) 0.18
C) 0.63
D) 0.81

Correct Answer:

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