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Suppose the Following Equation Best Describes the Evolution of β

Question 9

Multiple Choice

Suppose the following equation best describes the evolution of β over time: βt = 0.4 + 0.6βt - 1.
If a stock had a β of 0.9 last year, you would forecast the β to be _______ in the coming year.


A) 0.45
B) 0.60
C) 0.70
D) 0.94

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