Which of the following statements is MOST correct regarding beta?
A) Beta must be calculated using at least 5 years of monthly returns data to be accurate.
B) Beta can only be measured properly using daily returns.
C) Beta for a particular company remains constant over time.
D) Even professionals may not agree on the measurement of beta.

Question

Quizplus · Accepted Answer

Even professionals may not agree on the measurement of beta because there are different methods and assumptions that can be used to calculate it. Additionally, beta can change over time due to various factors, such as changes in the company's business or market conditions. Therefore, there may be some level of subjectivity and debate around what the "correct" or most accurate beta measurement is. Option A is incorrect because a shorter time period can also be used to calculate beta, although a longer period may provide more reliable results. Option B is incorrect because beta can be calculated using different time intervals, including daily, weekly, or monthly returns. Option C is incorrect because beta is not constant and can change over time.

Which of the Following Statements Is MOST Correct Regarding Beta