Given the Following Returns on Stock J and the "Market

question 8

Multiple Choice

Given the following returns on Stock J and the "market" during the last three years,what is the beta coefficient of Stock J? (Hint: Think rise over run.)

• A)1.58
• B)1.66
• C)1.75
• D)1.84
• E)1.93

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Definitions:

Zero Standard Deviation

A statistical measure indicating that all values within a data set are identical.

Risk-Free Asset

A financial instrument that is considered to have no risk of financial loss, typically government bonds.

Standard Deviation

A statistic that measures the dispersion or variability of a set of data values around the mean (average) of those values.

Expected Profit

The forecasted amount of profit that a business or investment is projected to earn over a specific period.