An Asset Has a Standard Deviation of 30% and a Correlation

question 31

Multiple Choice

An asset has a standard deviation of 30% and a correlation with the market portfolio of 0.60.If the market has a standard deviation of 30%,how much lower is the beta of the asset relative to the market?

• A) \( 0.05 \)
• B) \( 0.10 \)
• C) \( 0.18 \)
• D) \( 0.40 \)

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Definitions:

Appendix

A small, tube-like organ attached to the large intestine but has no known essential function in humans, famous for its potential to become inflamed (appendicitis).

Lactose Intolerance

A condition where individuals cannot digest lactose properly, leading to gastrointestinal symptoms upon consuming dairy products.

Lactase Activity

The function of the enzyme lactase, which is responsible for breaking down lactose, a sugar found in milk and dairy products, into simpler sugars that can be absorbed by the body.

Ethnic Group

A community or population made up of people who share a common cultural background or descent.