You are trying to estimate a beta for Sosa Inc., a Brazilian retail firm. The...
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You are trying to estimate a beta for Sosa Inc., a Brazilian retail firm. The stock is widely traded and 20% of the shares are held by global investors, who account for 60% of the trading on the stock. It has also depository receipts (ADR) listed in the US, which are dollar denominated and liquid. Which of the following regressions would you use to estimate the beta? (Hint: beta should be estimated using information that pertains to the marginal investor of a particular stock)
a.
The local listing against the Bovespa, the Brazilian equity index
b.
None of the above
c.
The ADR, against the S&P 500
d.
The local listing against an index of Brazilian retailers
e.
The ADR, against the MSCI, a global equity index
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