You Have the Following Data on (1)the Average Annual Returns

question 33

Multiple Choice

You have the following data on (1) the average annual returns of the market for the past 5 years and (2) similar information on Stocks A and B.Which of the possible answers best describes the historical betas for A and B?

• A) bA > 0;bB = 1.
• B) bA > +1;bB = 0.
• C) bA = 0;bB = -1.
• D) bA < 0;bB = 0.
• E) bA < -1;bB = 1.

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Definitions:

Soybeans

A type of legume native to East Asia, widely grown for its edible bean which has numerous uses, including oil, meal, and as a vegetable.

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