Characteristic Line

You are given the following set of data:

	Historical Rates of Return
Year		NYSE		Stock Y
1		4.0	%	3.5	%
2		14.3		17.7
3		19.0		9.2
4		- 14.7		- 9.0
5		- 26.5		- 12.2
6		37.2		32.1
7		23.8		6.7
8		- 7.2		3.5
9		6.6		13.9
10		20.5		22.7
11		30.6		17.0
	Mean =	9.8	%	9.6	%
	=	19.6	%	13.1	%

Use a spreadsheet or a calculator with a linear regression function to estimate beta. Round your answer to two decimal places.

Beta =

Give a verbal interpretation of what the regression line and the beta coefficient show about Stock Y's volatility and relative risk as compared with those of other stocks. Round your answers to the nearest whole. Stock Y is about ______ percent as volatile as the market; thus, its relative risk is about ______ percent of that of an average firm.