Question
You have the following data on (1) the average annual returns of the market for the past 5 years and (2) similar information on Stocks
You have the following data on (1) the average annual returns of the market for the past 5 years and (2) similar information on Stocks A and B. Which of the possible answers best describes the historical betas for A and B?
| Years | Market | Stock A | Stock B |
| 1 | 0.03 | 0.16 | 0.05 |
| 2 | -0.05 | -0.20 | 0.05 |
| 3 | 0.01 | 0.12 | 0.05 |
| 4 | -0.10 | -0.25 | 0.05 |
bA <0;bB=0
bA=0;bB=-1
bA>1;bB=0
bA>0;bB<0
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Financial Analysis With Microsoft Excel 2016
Authors: Timothy R. Mayes, Todd M. Shank
8th Edition
1337298042, 9781337298049
