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  "documentTitle": "Bear Stearns | Investment Banking Pitch Book | 36 slides",
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  "notes": "Includes the specific formula for adjusted beta: (Unadjusted beta * 2/3) + (1.00 * 1/3).",
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      "text": "The most widely used index is the S&P 500, largely because it has been used frequently to calculate market risk premia. The most notable example is Ibbotson Associates' calculation of the market risk premium since 1926.",
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      "text": "Most sources adjust the historical beta toward 1.00 since the beta of most stocks converges to 1.00 over time. The adjustment formula is: Adjusted Beta = (Unadjusted beta * 2/3) + (1.00 * 1/3).",
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      "text": "The return on the market should theoretically reflect a weighted index of all possible investments available to an investor (common stocks, preferred stocks, bonds, commodities, real estate, etc.), both domestically and internationally.",
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      "text": "Unadjusted historical betas are calculated according to the strict mathematical definition, but empirically they have not accurately predicted future price movements as they tend to be too high.",
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