Consider the following average annual returns for Stocks A and B and the Market.Which of the possible answers best describes the historical betas for A and B?
$\begin{array}{cc}\text { \underline{Years }} &\text { \underline{Market} } & \text { \underline{Stack A }} & \text { \underline{Stack B} } \\1&0.03& 0.16&0.05\\2 & -0.05&0.20 &0.05 \\3 & 0.01&0.18 & 0.05\\4 & -0.10 &0.25 &0.05\\5 & 006& 0.14&0.05\end{array}$

Question

Consider the following average annual returns for Stocks A and B and the Market.Which of the possible answers best describes the historical betas for A and B?

\begin{array}{cc}\text { \underline{Years }} &\text { \underline{Market} } & \text { \underline{Stack A }} & \text { \underline{Stack B} } \\1&0.03& 0.16&0.05\\2 & -0.05&0.20 &0.05 \\3 & 0.01&0.18 & 0.05\\4 & -0.10 &0.25 &0.05\\5 & 006& 0.14&0.05\end{array}

Quizplus · Accepted Answer

The Answer of Consider the following average annual returns for Stocks A and B and the Market.Which of the possible answers best describes the historical betas for A and B? $\begin{array}{cc} \text { \underline{Years }} &\text { \underline{Market} } & \text { \underline{Stack A }} & \text { \underline{Stack B} } \ 1&0.03& 0.16&0.05\ 2 & -0.05&0.20 &0.05 \ 3 & 0.01&0.18 & 0.05\ 4 & -0.10 &0.25 &0.05\ 5 & 006& 0.14&0.05 \end{array}$ A) b_A > +1; b_B = 0. B) b_A = 0; b_B = -1. C) b_A < 0; b_B = 0. D) b_A < -1; b_B = 1. E) b_A > 0; b_B = 1.

Consider the Following Average Annual Returns for Stocks a and B