Question: You have developed data which give the average annual returns on the market for the past five years, and similar information on stock A. If

You have developed data which give the average annual returns on the market for the past five years, and similar information on stock A. If these data are as follows, which of the possible answers best describe the historical correlation coefficient between stock A and the market?

YEARS MARKET STOCK A

1 .03 .65

2 -.05 .65

3 .01 .65

4 -.10 .65

5 .06 .65

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

You have developed data which give the average annual returns on the market for the past five years, and similar information on stock A. If these data are as follows, which of the possible answers...

You have the following data on three stocks: Stock Standard Deviation Beta A 20% 0.59 B 10% 0.61 C 12% 1.29 If you are a strict risk minimizer, you would choose Stock ____ if it is to be held in...

1. A bond that pays no annual interest but is sold at a discount below its par value is called what? a. Income bond. b. Callable bond. c. Convertible bond. d. Putable bond. e. Zero coupon bond. 2....

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...

You have developed data with (1) the annual percentage returns of the market for the past five years and (2) similar annual percentage returns information on Stocks A and B. Which of the possible...

You have developed data with (1) the annual percentage returns of the market for the past five years and (2) similar annual percentage returns information on Stocks A and B. Years Market % returns...

Chapter 6: Risk and Returns 4. What is the approximate expected coefficient of variation of returns for a projected one-year project that is 50%50% probabilities to give 30% return as it is to...

give me 5 types answer Assume that a 10-year, $1,000 face value bond pays interest of $37.50 every 3 months. If you require an annual rate of return of 12 percent, with quarterly compounding, how...

The following table shows the prices of a sample of Treasury strips. Each strip makes a single payment at maturity. Years to Maturity Price, (% of face value) 1 96.952 % 2 93.451 3 89.644 4 85.580 a....

There are a wide range of theories about the reasons for establishing governments. They do not always fully oppose each other - it is possible for a person to subscribe to a combination of ideas from...

What is your level of risk tolerance and how can it influence your investment decision?

A company is preparing completing their Cash Budget. The following data has been prepared for cash receipts and payments. January February March Cash receipts $1,061,200 $1,182,400 $1,091,700 Cash...