The market rate of return increased by 8% while the rate of return on XYZ shares increased by 4%. The beta of XYZ shares is
A) 0.50.
B) - 0.40.
C) 2.0.
D) - 2.0.

Name: The market rate of return increased by 8% while the rate of return on XYZ shares increased by 4%. The beta of XYZ shares is A) 0.50. B) - 0.40. C) 2.0. D) - 2.0.
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Question

Quizplus · Accepted Answer

Beta is calculated as the change in the stock's return divided by the change in the market return. Here, 4% / 8% = 0.50.

The Market Rate of Return Increased by 8% While the Rate