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I was reading a paper titled "Betting against Beta" (link). The paper has five major propositions. The fourth proposition is that betas are compressed towards one when funding liquidity risk is high. I am not able to understand what is the interpretation of this statement. Further, the authors have constructed three portfolios sorted by TED volatility for U.S. stocks. I was not able to understand the mechanism behind this sorting. Page 18; table 10 of the paper.

nbbo2
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jeetkamal
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    For the first question they seem to mean that beta $\beta$, is decresing in funding risk when $\beta>1$ and increasing when $\beta<1$. – fes May 16 '21 at 09:13

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