The correlation coefficient between a stock and the market portfolio is +0.6. The standard deviation of return of the stock is 30 percent and that of the market portfolio is 20 percent. Calculate the beta of the stock.
A)1.1
B)1.0
C)0.9
D)0.6

Question

Quizplus · Accepted Answer

The Answer of The correlation coefficient between a stock and the market portfolio is +0.6. The standard deviation of return of the stock is 30 percent and that of the market portfolio is 20 percent. Calculate the beta of the stock.
A)1.1
B)1.0
C)0.9
D)0.6

The Correlation Coefficient Between a Stock and the Market Portfolio