The beta of a stock A is 1.52 and its standard deviation is 0.0765.If the standard deviation of the market is 0.0543,what is stock A's covariance with the market?
A)0.0089
B)0.0063
C)0.0078
D)0.0045

Question

Quizplus · Accepted Answer

The covariance of a stock with the market can be calculated using the formula: Covariance = Beta * Standard Deviation of the Market * Standard Deviation of the Stock. Plugging in the values given: Covariance = 1.52 * 0.0543 * 0.0765 = 0.0063.

The Beta of a Stock a Is 1