Business, 28.08.2020 15:01 jasmine3051

Which of the following is not a potential problem when estimating and using betas, i. e., which statement is false? A. The beta of an "average stock," or "the market," can change over time, sometimes drastically.
B. Sometimes, during a period when the company is undergoing a change such as toward more leverage or riskier assets, the calculated beta will be drastically different from the "true" or "expected future" beta.
C. The beta coefficient of a stock is normally found by regressing past returns on a stock against past market returns. This calculated historical beta may differ from the beta that exists in the future.
D. The fact that a security or project may not have a past history that can be used as the basis for calculating beta.
E. Sometimes the past data used to calculate beta do not reflect the likely risk of the firm for the future because conditions have changed.

Answers: 3

Show answers

Another question on Business

Business, 21.06.2019 20:30

Which of the following mechanisms would be most likely to motivate managers to act in the best interests of shareholders? a) decrease the use of restrictive covenants in bond agreements, b) take actions that reduce the possibility of a hostile takeover, c) elect a board of directors that allows managers greater freedom of action, d) increase the proportion of executive compensation that comes from stock options and reduce the proportion that is paid as cash salaries, e) eliminate a requirement that members of the board directors have a substantial investment in the firm's stocks

Answers: 2

Answer

Business, 22.06.2019 11:10

The prebisch–singer hypothesis concludes that: a. technology lowers the cost of manufactured products, so developing countries should see an increase in their terms of trade. b. developing countries experience a long-run decline in their terms of trade, as the demand for primary products in higher-income countries declines relative to their demand for manufactured goods. c. because of unfair trading practices, labor in developing countries is exploited. d. opec has been responsible for a slowdown in the world's standard of living.

Answers: 3

Answer

Business, 22.06.2019 15:40

Acompany manufactures x units of product a and y units of product b, on two machines, i and ii. it has been determined that the company will realize a profit of $3 on each unit of product a and $4 on each unit of product b. to manufacture a unit of product a requires 7 min on machine i and 5 min on machine ii. to manufacture a unit of product b requires 8 min on mchine i and 5 min on machine ii. there are 175 min available on machine i and 125 min available on machine ii in each work shift. how many units of a product should be produced in each shift to maximize the company's profit p?

Answers: 2

Answer

Business, 22.06.2019 20:00

Suppose a country's productivity last year was 84. if this country's productivity growth rate of 5 percent is to be maintained, this means that this year's productivity will have to be:

Answers: 2

Answer

You know the right answer?

Which of the following is not a potential problem when estimating and using betas, i. e., which stat...

Questions