Empirical results estimated from historical data indicate that betas ________.

A) are always close to zero
B) are constant over time
C) of all securities are always between zero and 1
D) seem to regress toward 1 over time

Question

manoli athanasakis · Accepted Answer

Final Answer : D, Explanation :  Empirical results suggest that betas tend to regress toward 1 over time, meaning they move closer to the market average. Betas can be greater than 1 or less than 0, but they tend to regress toward 1 in the long run. Betas are not always close to zero or constant over time, and they can be greater than 1 or less than 0.

Empirical results estimated from historical data indicate that betas ________.

A) are always close to zero
B) are constant over time
C) of all securities are always between zero and 1
D) seem to regress toward 1 over time

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Related questions

Empirical results estimated from historical data indicate that betas ________.A) are always close to zeroB) are constant over timeC) of all securities are always between zero and 1D) seem to regress toward 1 over time

Definitions

Learning Objectives

Learning Objectives

Related questions

Empirical results estimated from historical data indicate that betas ________.

A) are always close to zero
B) are constant over time
C) of all securities are always between zero and 1
D) seem to regress toward 1 over time