The covariance of a particular stock within a portfolio is 0.35.The variance of the stock is 0.42.Calculate the stock's Beta.
A)0.833
B)1.20
C)1.77
D)1.50

Name: The covariance of a particular stock within a portfolio is 0.35.The variance of the stock is 0.42.Calculate the stock's Beta. A)0.833 B)1.20 C)1.77 D)1.50
Brand: Quizplus
Rating: 4.8 (45 reviews)

Question

Quizplus · Accepted Answer

Beta is calculated as the covariance of the stock with the market divided by the variance of the market. Here, assuming the covariance given is with the market, Beta = 0.35 / 0.42 = 0.833.

The Covariance of a Particular Stock Within a Portfolio Is