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A stock has a correlation with the market of .45. The standard deviation of the market is 21%, and the standard deviation of the stock is 35%. What is the stock's beta

Respuesta :

Answer:

0.75

Explanation:

Data provided in the question

Correlation with the market = 0.45

Standard deviation of the market = 21%

Standard deviation of the stock = 35%

So, by considering the above information, the stock beta is

Stock beta = Correlation with the market × Standard deviation of the stock ÷ Standard deviation of the market

= 0.45 × 35% ÷ 21%

= 0.75

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