Question

A stock has a correlation with the market of 0.53. The standard deviation of the market is 29%, and the standard deviation of the stock is 32%. What is the stock's beta?

Answer 1

Answer: 0.58

Step-by-step explanation:

Given the parameters in the question, Beta can be solved by the following formula;

= Correlation with market * ( Standard deviation of stock / Standard deviation of market)

= 0.53 * (32%/29%)

= 0.58