You Are Given the Following Returns on "The Market" and Stock

question 4

Multiple Choice

You are given the following returns on "the market" and Stock Q during the last three years. We could calculate beta using data for Years 1 and 2 and then, after Year 3, calculate a new beta for Years 2 and 3. How different are those two betas, i.e., what's the value of beta 2 - beta 1? (Hint: You can find betas using the Rise-Over-Run method, or using your calculator's regression function.)

• A) \( 7.89 \)
• B) \( 8.30 \)
• C) \( 8.74 \)
• D) \( 9.20 \)
• E) \( 9.66 \)

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