Company A's Historical Returns for the Past Three Years Are

question 39

Multiple Choice

Company A's historical returns for the past three years are: 6%,15%,and 15%.Similarly,the market portfolio's returns were: 10%,10%,and 16%.Calculate the beta for Stock

• A)1.75
• B)1.0
• C)0.57
• D)0.75

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Definitions:

Discriminant Validity

The measure of how much a test does not relate to variables or measures it should not be associated with.

Correlation Coefficient

The relationship between two sets of scores. Correlation coefficients range from +1 to -1 and generally are reported in decimals of one-hundredths. A positive correlation shows a tendency for scores to be related in the same direction, while a negative correlation indicates an inverse relationship.

Verbal Reasoning

The ability to understand and reason using concepts framed in words, often assessed through standardized tests.

Problem Solving

The process of identifying solutions to specific issues by employing logical and creative thinking strategies.