The Common Stock of Blasco Books Has a Standard Deviation

question 51

Multiple Choice

The common stock of Blasco Books has a standard deviation of 16.4 percent as compared to the market standard deviation of 12.7 percent.The covariance of this stock with the market is .0217.What is the beta of Blasco Books' stock?

• A).96
• B)1.05
• C)1.07
• D)1.35
• E)1.42

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Definitions:

Slope

A measure of the steepness or incline of a line, represented as the ratio of the vertical change to the horizontal change between two points on the line.

Vertical Axis

The vertical number line of a graph along which values of the y-variable are measured; also referred to as the y-axis.

Linear Relationship

The relationship between two variables in which the slope is constant and therefore is depicted on a graph by a curve that is a straight line.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a particular price over a specified period.