Use the following data to answer the questions that follow.

Company

Beta

Savoy Corp.

0.65

0.65

Hokie Industries

1.44

1.44

Graham Records

2.27

2.27

Expo Enterprises

0.45

0.45

S&P 500

1.00

a. If theS&P 500 goes up by 24.36

24.36 percent, how much should the stocks ofSavoy, Hokie,Graham, and Expo change invalue?

b. If the stock market drops by 8.75

8.75 percent, which one of these stocks should outperform theothers? Why?

a. If theS&P 500 goes up by 24.36

24.36 percent, the stock of Savoy would change in value by

nothing

%. (Round to two decimalplaces.)