Question
In: Finance
Analysts often cite mean reversion as the reason why they will sometimes adjust a beta factor....
Analysts often cite mean reversion as the reason why they will sometimes adjust a beta factor. If an analyst observed a statistically significant beta of 1.71, what would be the adjusted beta? State your answer in two decimal places.
Solutions
Expert Solution
Adjusted beta = statistically significant beta * 2/3 + 1/3
Adjusted beta = 1.71 * 2/3 + 1/3
Adjusted beta = 1.14 + 0.3333333333
Adjusted beta = 1.4733333333
Adjusted beta = 1.47
jeff jeffy answered 2 years agoRelated Solutions
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