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You Have Developed Data Which Give (1) the Average Annual

Question 77

Multiple Choice

You have developed data which give (1) the average annual returns on the market for the past five years, and (2) similar information on Stocks A and B.If these data are as follows, which of the possible answers best describes the historical betas for A and B? You have developed data which give (1) the average annual returns on the market for the past five years, and (2) similar information on Stocks A and B.If these data are as follows, which of the possible answers best describes the historical betas for A and B? A) β<sub>A</sub> > 0; β<sub>B</sub> = 1 B) β<sub>A</sub> > +1; β<sub>B</sub> = 0 C) β<sub>A</sub> = 0; β<sub>B</sub> = −1 D) β<sub>A</sub> < 0; β<sub>B</sub> = 0 E) β<sub>A</sub> < −1; β<sub>B</sub> = 1


A) βA > 0; βB = 1
B) βA > +1; βB = 0
C) βA = 0; βB = −1
D) βA < 0; βB = 0
E) βA < −1; βB = 1

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