Q714
Formula written as 0.67(Historical Beta) + 0.35(1.0) is used to calculate
A.
historical betas
B.
adjusted betas
AnswerC.
standard betas
D.
varied betas
Answer: Option B
Solution
Answer: Option B
Solution:
Formula written as 0.67(Historical Beta) + 0.35(1.0) is used to calculate adjusted betas. The Adjusted Beta is an estimate of a security's future Beta. Adjusted Beta is initially derived from historical data, but modified by the assumption that a security's true Beta will move towards the market average, of 1, over time.