Problem 12-22 Calculating Beta (LO4, CFA1)

You are given the following information concerning a stock and the market:

	Returns
Year	Market			Stock
2014		14	%		26	%
2015		10			10
2016		20			3
2017		15			31
2018		35			16
2019		15			18

a. Calculate the average return and standard deviation for the market and the stock. (Use Excel to complete the problem. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

	Market	Stock
Average return	_____%	_____%
Standard deviation	_____%	_____%

b. Calculate the correlation between the stock and the market, as well as the stocks beta. (Use Excel to complete the problem. Do not round intermediate calculations. Round your correlation answer to 2 decimal places and beta answer to 4 decimal places.)

Correlation
Beta