The Annual Returns for Three Years for Stock B Were

question 78

Multiple Choice

The annual returns for three years for stock B were 0 percent, 10 percent, and 26 percent. Annual returns for three years for the market portfolio were +6 percent, 18 percent, and 24 percent. Calculate the beta for the stock.

• A)0.75
• B)1.36
• C)1.00
• D)0.74

---

Definitions:

Effective Rate

The actual interest rate of an investment or loan, taking into account the compounding of interest.

Effective Rate

The real rate of interest earned or paid on an investment or loan in a specified period, considering compounding.

Monthly Compounded

Refers to the process of adding interest to the principal sum of a loan or deposit, recalculated on a monthly basis. This is a repeat of Compounded Monthly with a new definition focusing on recalculating interest increase.

Compounded Monthly

Compounded monthly refers to the process where the interest earned on an investment is added to the principal sum each month, causing the principal amount to grow at an increasing rate.