Return on Stocks 30% 20% b = 1.00 1095 Return on Markel 1. For a stock with a beta coefficient of b = 1.50, it is 3. more volatile than the average stock b. about the same volatility of an average stock C. less volatile than the average stock d. Cannot determine. 2. For a stock with a beta coefficient of b - 1.50, in a year when the market return is 20%, we expect, in this particular example, the stock's return to be: a. about 2006 b. about 25% c. about 30% d. not enough information to determine 10%, we expect, in this particular example, the stock's return to be 3. For a stock with a beta coefficient of 150, in a year a. about 0% b. about 10% c. about -20% d. about -30% -Select " Betas: Stock Volatility Conceptual Overview: Explore how stock volatility relates to the beta coefficient b risk meas The tendency of a stock to move with the market is measured by its beta coefficient. When first loaded the graph shows the line for an average stock, which necessarily matches the market return. In a year when the market returns 10%, the average stock returns 10% and in a year when the market goes down -10%, the average stock goes down -10% also. The slope of the line for the average stock is b 1.0. A more volatile stock would change more extremely Drag the line vertically so that it has a slope of b 20. For this more volatile stock, in a year when the market returned 20% the volatile stock did better with a 30% return, and when the market lost - 10%, the volatie stock lost big with a -30% change. Now drag the ine so that as a slope ofb05 This stock is less volatie than the average stock and reacts less extremely than the market in a year the market returned 20%, the less volatile stock returned slightly less at about 15% and in a yes when the market lost-10%, the loss volante stock did a letter better with Yeturn There are two simple principles 1. The larger the beta coefficient de the steeper the slope), the more volatie the returns from the stock 2. Bota coefficients b greater than 10 indicate the stock is more volatile than average and slopes less than 1.0 indicate the stock is less volatile than average