Question
1. You have the following data on (1) the average annual returns of the market for the past 5 years and (2) similar information on
1. 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 | Market | Stock A | Stock B |
| 1 | 0.03 | 0.16 | 0.05 |
| 2 | -0.05 | 0.20 | 0.05 |
| 3 | 0.01 | 0.18 | 0.05 |
| 4 | -0.10 | 0.25 | 0.05 |
| 5 | 0.06 | 0.14 | 0.05 |
What do we know about the beta of each stock?
Stock A?
Stock B?
Which stock has a higher beta?
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The Changing Geography Of Banking And Finance
Authors: Pietro Alessandrini ,Michele Fratianni ,Alberto Zazzaro
1st Edition
1441947205, 978-1441947208
