Air Canada Stock Has a Standard Deviation of 18%,while the Market

question 94

Multiple Choice

Air Canada stock has a standard deviation of 18%,while the market index standard deviation is 8%.If the correlation between Air Canada and the market index is 0.45,what is the beta of Air Canada stock?

• A)1.01
• B)0.03
• C)0.2
• D)2.25
• E)2.5

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Definitions:

Incremental Cash Inflow

Additional cash earnings a company receives from undertaking certain actions, such as launching a new product or project.

Net 30 Credit Policy

A payment term that allows a customer 30 days to pay the full amount on an invoice without incurring interest or penalties.

Monthly Interest Rate

The interest rate applied to a loan or debt for each month, often used to calculate the interest expense on outstanding debt for the month.

Restocking Costs

The expenses associated with replenishing inventory once it has been sold to customers.