You have the following data on (1) the average annual returns of the market for the...

1.  

Transcribed Image Text:

You have the following data on (1) the average annual returns of the market for the past 5 years and (2) similar information on Stocks A and B. Which of the possible answers best describes the historical betas for A and B? Years 1 2 3 4 5 O a. bA < -1; bB = 1. O b. bA> 0; bB = 1. c. bA> +1; bB = 0. d. bA < 0; bB = 0. O e. bA= 0; bB = -1. Market 0.03 -0.05 0.01 -0.10 0.06 Stock A 0.16 0.20 0.18 0.25 0.14 Stock B 0.05 0.05 0.05 0.05 0.05 You have the following data on (1) the average annual returns of the market for the past 5 years and (2) similar information on Stocks A and B. Which of the possible answers best describes the historical betas for A and B? Years 1 2 3 4 5 O a. bA < -1; bB = 1. O b. bA> 0; bB = 1. c. bA> +1; bB = 0. d. bA < 0; bB = 0. O e. bA= 0; bB = -1. Market 0.03 -0.05 0.01 -0.10 0.06 Stock A 0.16 0.20 0.18 0.25 0.14 Stock B 0.05 0.05 0.05 0.05 0.05

Answer rating: 100% (QA)

ANS BA 0 Bb0 Beta ... View the full answer