(Answered) 1 given the following results indicate what will happen to

Economics

1. Given the following results, indicate what will happen to the beta for Sophie Fashion Co., relative to the market proxy, compared to the beta relative to the true market portfolio:

YEARLY RATES OF RETURN

Year Sophie Fashion (%) Market Proxy (%) True Market (%)

1	10	8	6
2	20	14	11
3	-14	-10	-7
4	-20	-18	-12
5	15	12	10

Discuss the reason for the differences in the measured betas for Sophie Fashion Co. Does the suggested relationship appear reasonable? Why or why not?

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Microeconomics, Economics

Category:- Microeconomics
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