The Correlation Coefficient Between Stock B and the Market Portfolio

question 24

Multiple Choice

The correlation coefficient between stock B and the market portfolio is 0.8. The standard deviation of the stock B is 35% and that of the market is 20%. Calculate the beta of the stock.

• A) 1.0
• B) 1.4
• C) 0.8
• D) 0.7

---

Definitions:

Cardiac Muscle

Specialized muscle tissue found only in the heart, characterized by involuntary contractions that pump blood throughout the body.

Neurons

Specialized cells transmitting nerve impulses; the basic working units of the brain and nervous system.

Neuroglia

Neuroglia, also known as glial cells, are non-neuronal cells in the nervous system that provide support, protection, and nourishment to neurons.

Nerve Impulses

Electrical signals transmitted along nerve fibers, used for communication between neurons or between neurons and muscles.