Research has revealed that regardless of what the current estimate of a firm's beta is,it will tend to move closer to ______ over time.
A) 1
B) 0
C) -1
D) 0.5

Question

Quizplus · Accepted Answer

Beta is a measure of a stock's volatility in relation to the overall market. Research has shown that regardless of the current estimate of a firm's beta, it will tend to move closer to 1 (the market's beta) over time due to market forces and the firm's performance. Therefore, option A is the best choice.

Research Has Revealed That Regardless of What the Current Estimate