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Management · Q427

Financial Management

Graduate and Post Graduate · Management · question 427

Q427

Beta which is estimated as regression slope coefficient is classified as

A.
historical beta
Answer
B.
market beta
C.
coefficient beta
D.
risky beta

Answer: Option A

Solution

Answer: Option A
Solution:
Beta which is estimated as regression slope coefficient is classified as historical beta. A beta coefficient is a measure of the volatility, or systematic risk, of an individual stock in comparison to the unsystematic risk of the entire market. In statistical terms, beta represents the slope of the line through a regression of data points from an individual stock's returns against those of the market.