#3

3-4. Find the CAPM beta of the following stock, where Reis stock return, RM is market return, Reis average of stock returns, R is average of market returns, COV(RR) is covariance between Rg and Ry, and VARCR) variance of market returns. RE Ro-Ro Rx RM - Ru (R - R) (Ru - Ru) Year 1 0.2 -0,2 2. -0.1 0.1 3 0.1 -0.1 4 -0.2 0.2 RE RM COV( RR)- VAR(R) = CAPM beta = COV(Rp, R/VAR(R)= 3. What is the CAPM beta? A. 0.9 B.-0.9 C.1 D. -1 E.O