CFA Practice Question

There are 57 practice questions for this study session.

CFA Practice Question

The decision to use a particular index to represent the market portfolio will affect the estimation of:

I. equity risk premium.
II. beta estimate for a particular stock.
Correct Answer: I and II

The decision affects both estimates.

The value of β estimated depends on a few choices too: which market index to be used? what's the data period? the frequency of observations?

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