The systematic response coefficient for productivity,β_p,would produce an unexpected change in any security return of (β_P × ________)if the expected rate of productivity was 1.5 percent and the actual rate was 2.25 percent.

Question

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The systematic response coefficient for productivity indicates how much the return on a security is expected to change in response to a change in productivity. Given the expected rate of productivity was 1.5 percent and the actual rate was 2.25 percent, the unexpected change in productivity is 2.25% - 1.5% = 0.75%. Therefore, the unexpected change in any security return would be (β_p × 0.75%).

The Systematic Response Coefficient for Productivity,βp,would Produce an Unexpected Change

The Systematic Response Coefficient for Productivity,β_p,would Produce an Unexpected Change