Which of the following is a concern regarding beta?
A) Using different market proxies will result in different estimates of beta.
B) A company can alter its risk level which may make the beta estimate obsolete.
C) Research indicates that a company's beta does not appear to predict its future return very well.
D) All of these choices are correct.

Question

Quizplus · Accepted Answer

All the choices listed are valid concerns regarding beta. Choice A highlights the issue of varying beta estimates depending on the market proxy used. Choice B points out that a company can change its risk level, potentially rendering a beta estimate outdated. Choice C addresses the limitation of beta in predicting future returns, as supported by research.

Which of the Following Is a Concern Regarding Beta