Stock a Has a Standard Deviation of 20 Percent and a Correlation

question 8

Multiple Choice

Stock A has a standard deviation of 20 percent and a correlation coefficient of 0.64 with market returns.The expected return of the market is 12 percent with a standard deviation of 15 percent.The risk-free rate is 5 percent.What is the beta of Stock A?

• A) 0.48
• B) 0.75
• C) 0.85
• D) 1.33

Understand the arguments for and against protectionism, including economic efficiency and consumer impact.

Recognize the role of trade barriers in affecting domestic consumption and world production.

Assess the claims of unfair trade practices and their implications for international trade relations.

Understand the concept of free trade and its potential to expand production and consumption beyond domestic limitations.

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Definitions:

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for competition based on factors other than price, such as quality and branding.

Price

The monetary value attached to acquiring a good or service.

Downward Sloping

Illustrates a decrease or decline in value or quantity in response to an increase in another variable, often related to price and demand in economic contexts.

Demand Curve

A graph showing the relationship between the quantity of a good or service that consumers are willing to buy and its price.