Stock A has an expected return of 12 percent and a variance of .0203.The market has an expected return of 11 percent and a variance of .0093.What is the beta of Stock A if the covariance of Stock A with the market is .0137?
A).68
B).76
C)1.55
D)1.47
E)1.32

Question

Quizplus · Accepted Answer

Beta is calculated as the covariance of the stock with the market divided by the variance of the market. Thus, Beta = 0.0137 / 0.0093 = 1.47.

Stock a Has an Expected Return of 12 Percent and a Variance