Question
Cream Co is projected to have a return of 32% if the economy is very strong, while it is expected to have a return of
Cream Co is projected to have a return of 32% if the economy is very strong, while it is expected to have a return of 4% if the economy is weak. Crimson Co is expected to have a return of 2% if the economy is very strong, while it is expected to have a return of 10% if the economy is very weak. The S&P 500 Index is expected to have a return of 13% in a very strong economy, while it is projected to have a return of -3% in a weak economy.
Assume each scenario is equally likely. Rounded to two places, what is the Beta of Crimson Co?
Multiple Choice
None of the above
0.75
0.50
-1.25
-1.50
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