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Solo Industries is a manufacturer of gas-powered engines. It is a small company in a mature industry and its shares have low market liquidity. Its

Solo Industries is a manufacturer of gas-powered engines. It is a small company in a mature industry and its shares have low market liquidity. Its raw betas were 0.82 and 0.65 when its share price returns were regressed against the returns on the market portfolio for the same month and then again for the month before over five years using monthly observations.

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1. What is the most appropriate adjusted beta for Solo?

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