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

question 44

Multiple Choice

You are given the following returns on the Market and on Stock A.Calculate Stock A's beta coefficient. $\begin{array}{ccc}\text { Year } & \text { Market } & \text { Stock A } \\\hline 2005 & -5.00 \% & -15.00 \% \\2006 & 11.00 \% & 12.00 \% \\2007 & 25.00 \% & 40.00 \%\end{array}$

• A)1.74
• B)1.83
• C)1.92
• D)2.02

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Definitions:

Fixed Asset

A durable, physical asset that a company possesses and employs in its business activities to produce revenue.

Salvage Value

Salvage value is the estimated residual value of an asset at the end of its useful life, indicating how much the asset can be sold for after it is no longer useful for its intended purpose.

Estimated Life

The expected period over which an asset will be useful in the operations of a business.

Units-Of-Output Method

A depreciation technique that allocates the cost of an asset based on its usage, work output, or units produced.