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You have developed data which give (1) the average annual returns on the market for the past five years, and (2) similar information on Stocks
You have developed data which give (1) the average annual returns on the market for the past five years, and (2) similar information on Stocks A and B. If these data are as follows, which of the possible answers best describes the historical betas for A and B ? (Note: You do not have to actually calculate betas to arrive at the correct answer) The beta for stock A is greater than zero and the beta for stock B is 1 . The beta for stock A is greater than 1 and the beta for stock B is zero. The beta for stock A is zero and the beta for stock B is 1. The beta for stock A is less than 1 and the beta for stock B is 1 . The beta for stock A is less than zero and the beta for stock B is zero
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