Which of the following statements is FALSE? O a. For stocks, common practice is to use at least two years of weekly return data or five years of monthly return data when estimating beta. O b. When using historical data, there is always the possibility of estimation error. O c. We should be suspicious of beta estimates that are extreme relative to industry norms. O d. Evidence suggests that betas tend to revert toward zero over time.
Which of the following statements is FALSE? O a. For stocks, common practice is to use at least two years of weekly return data or five years of monthly return data when estimating beta. O b. When using historical data, there is always the possibility of estimation error. O c. We should be suspicious of beta estimates that are extreme relative to industry norms. O d. Evidence suggests that betas tend to revert toward zero over time.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Which of the following statements is FALSE?
O a. For stocks, common practice is to use at least two years of weekly return data or five years of monthly return data when estimating beta.
O b. When using historical data, there is always the possibility of estimation error.
O c. We should be suspicious of beta estimates that are extreme relative to industry norms.
O d. Evidence suggests that betas tend to revert toward zero over time.
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