In Q19 of the 2009 free sample, after getting the effective beta of 1.27, how do we conclude that it`s effective or ineffective? Thanks !
Sorry… it should be 2009 Sample Version 3. Return on market = -3.5% total return on portfolio and hedge = -0.051 + 0.0064 So effective Beta =( -0.051 + 0.0064 ) / -0.035 = 1.27 But why are we saying that 1.27 is effective ??