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 -0.06 -0.12 0.05

2 -0.05 -0.10 0.05

3 0.01 0.02 0.05

4 0.06 0.12 0.05

5 0.10 0.20 0.05

a. b A >; 0; b B = 1.

b. b A <; -1; b B = 1.

c. b A = 0; b B = -1.

d. b A <; 0; b B = 0.

e. b A >; 0; b B = 0.