Data

Stock i$$s standard deviation$52\mathrm{.}50\%$Market$$s standard deviation$48\mathrm{.}00\%$Correlation between Stock i and the market$0\mathrm{.}98$Beta coefficient of Stock i:$$

To calculate the beta of another company, using regression analysis, you get the value of R$^2$ as $0\mathrm{.}91.$ Based on your calculation, which of the following interpretations is true?

$91\%$ of the variance in the company$$s returns can be explained by the market returns.

$9\%$ of the variance in the company$$s returns can be explained by the market returns.