Tim is investing in an economy with ONLY TWO stocks: A and B. The market the capitalization of A is twice that of B. The standard deviations of A and B are: SigmaA = 30% and SigmaB = 50%. Their correlation coefficient is between A and B = 70%. What is the beta of stock A?

1. 1
2. 0.5
3. 0.89
4. 0.83