A Stock Has a Correlation with the Market of 0

question 43

Multiple Choice

A stock has a correlation with the market of 0.45.The standard deviation of the market is 21% and the standard deviation of the stock is 35%.What is the stock's beta?

• A) 1.00
• B) 0.75
• C) 0.60
• D) 0.55

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Definitions:

Net Sales

Revenue from the sale of goods or services after the deduction of returns, allowances for damaged or missing goods, and discounts.

P/E Ratio

Stands for Price-to-Earnings Ratio, which measures a company's current share price relative to its per-share earnings, often used to gauge valuation.

Dividend Discount Model

A method of valuing a company's stock price based on the theory that its stock is worth the sum of all of its future dividend payments, discounted back to their present value.

Financial Statements

Papers that offer a summary of a company's financial status, encompassing the balance sheet, income statement, and cash flow statement.