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20 January, 13:50

A stock has a correlation with the market of. 45. The standard deviation of the market is 21%, and the standard deviation of the stock is 35%. What is the stock's beta

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  1. 20 January, 16:22
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    0.75

    Explanation:

    Data provided in the question

    Correlation with the market = 0.45

    Standard deviation of the market = 21%

    Standard deviation of the stock = 35%

    So, by considering the above information, the stock beta is

    Stock beta = Correlation with the market * Standard deviation of the stock : Standard deviation of the market

    = 0.45 * 35% : 21%

    = 0.75
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