The covariance between YOHO stock and the S&P 500 is 0.05.The standard deviation of the stock market is 20%.What is the beta of YOHO?
A)0.00
B)1.00
C)1.25
D)1.42

Name: The covariance between YOHO stock and the S&P 500 is 0.05.The standard deviation of the stock market is 20%.What is the beta of YOHO? A)0.00 B)1.00 C)1.25 D)1.42
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Question

Quizplus · Accepted Answer

Beta = Covariance(YOHO, S&P 500) / Variance(S&P 500)
Beta = 0.05 / (0.2^2) = 1.25
Therefore, the answer is C) 1.25.

The Covariance Between YOHO Stock and the S&P 500 Is