The Table Below Gives the Historic Return Over the Past

question 72

Multiple Choice

The table below gives the historic return over the past five months for the market portfolio and two assets: A and B. Which of the answers below best describes the historic beta for A and B? $$\begin{array} { | c | c | c | c | } \hline \text { Month } & \text { Market } & \text { Asset A } & \text { Asset B } \\\hline \mathbf { 1 } & 3 \% & 5 \% & 4 \% \\\hline \mathbf { 2 } & - 5 \% & - 6 \% & 4 \% \\\hline \mathbf { 3 } & 1 \% & 4 \% & 4 \% \\\hline \mathbf { 4 } & - 10 \% & - 12 \% & 4 \% \\\hline \mathbf { 5 } & 6 \% & 10 \% & 4 \% \\\hline\end{array}$$

• A)?_A < 0; ?_B = 0
• B)?_A > 0; ?_B = +1
• C)?_A > 0; ?_B = 0
• D)?_A > +1; ?_B = 0
• E)?_A < -1; ?_B = +1

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Definitions:

Frequency

Frequency is the number of times a wave completes a cycle of oscillation per unit time, typically measured in hertz (Hz).

Wavelength

Wavelength is the distance between consecutive crests of a wave, especially points in a sound wave or electromagnetic wave.

Frequency

The quantity of times a cyclic event happens in a given time period, typically referred to in situations involving waves or oscillations.

Nanometers

A unit of length in the metric system, equal to one billionth of a meter, commonly used to measure wavelengths of light and the size of biological and chemical structures at the molecular level.