Question 6

A stock has its past returns graphed against market returns. The line that has the best fit for the return data has the formula y = 0.335x + 0.501. What information can we derive from this?

		The systematic risk of this stock is greater than that of the average stock.
		The stock must have earned lower returns than the market during that period.
		The beta of the stock is 0.501.
		The beta of the stock is 0.335.
		The alpha of this stock is 0.335.