Question

g If a stock consistently goes down (up) by 1.31% when the market portfolio goes down (up) by 1.05%, then its beta equals:

Answer 1

1.25

Step-by-step explanation:

The stock consistently goes down by 1.31%

The market portfolio goes up by 1.05%

The beta can be calculated as follows

1.31/1.05

= 1.25

Hence the beta is 1.25