-The Market Has a Standard Deviation of 13

question 37

Multiple Choice

$\begin{array}{c}\begin{array}{c}\underline{\text { Year }} \\1 \\2 \\3 \\4\end{array}\begin{array}{c}\underline{\text {Stock X}}\\-27 \% \\6 \% \\34 \%\\11\%\end{array}\begin{array}{c}\underline{\text { Market } }\\-7 \% \\11 \% \\18 \% \\10\%\end{array}\end{array}$


-The market has a standard deviation of 13.6% while a risky stock has a standard deviation of 22.4%. The covariance of the stock with the market is 0.012. What is the beta of the stock?

• A) 1.05
• B) -1.27
• C) 0.49
• D) 0.38
• E) 0.65

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Definitions:

Life Estate

A property interest that lasts for the lifetime of an individual, after which the property passes to another designated party.

Conditional Estate

A property interest that is dependent on the occurrence or non-occurrence of a specified condition.

Easement

A right granted to a party to use the property of another for a specific purpose, like a right-of-way.

Recording

Filing a deed, with any other related documents such as mortgages, with the appropriate county office, thereby giving official notice of the transfer to all interested parties.