Air Canada stock has a standard deviation of 10%,while the market index standard deviation is 7%.If the correlation between Air Canada and the market index is 0.85,what is the beta of Air Canada stock?
A)0.60
B)1.21
C)1.43
D)0.85
E)1.0

Question

Quizplus · Accepted Answer

Beta = (Standard deviation of Air Canada stock / Standard deviation of market index) x Correlation between Air Canada stock and market index
= (10% / 7%) x 0.85
= 1.21

Therefore, the answer is B) 1.21.

Air Canada Stock Has a Standard Deviation of 10%,while the Market