The Correlation Coefficient Between Stock a and the Market Portfolio

question 7

Multiple Choice

The correlation coefficient between stock A and the market portfolio is +0.6. The standard deviation of return of the stock is 30% and that of the market portfolio is 20%. Calculate the beta of the stock.

• A) 1.1
• B) 1.0
• C) 0.9
• D) 0.6

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Definitions:

Existentialist

Related to existentialism, a philosophy that emphasizes individual existence, freedom, and choice.

Own 'Being'

A philosophical or existential concept referring to the essence or nature of an individual’s existence or identity.

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The state or fact of having a duty to deal with something or of having control over someone, often with moral implications.

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A branch of psychotherapy that works with families and couples in intimate relationships to nurture change and development, focusing on systemic interactions within the family.