Right so there are two beta issues that i am confused about. One is beta in the Equity section when you need to adjust for beta drift as beta has a tendancy to revert to one and the other is in portfolio management with the beta instability problem where you adjust beta to it’s mean reverting level,one. Can someone please explain the differences here and how to spot what they are asking in questions???
I believe they are one in the same. Beta in portfolio management just shows the regession equation.