Consider the following annual returns for Stocks A and B and the Market over the...
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Consider the following annual returns for Stocks A and B and the Market over the past four years. Which answer best describes the historical betas for Stocks A and B?
Years Market Stock A Stock B 2018 0.03 0.10 -0.17 2019 0.02 0.10 -0.05 2020 -0.02 0.10 0.11 2021 0.01 0.10 -0.02
a. bA = 1; bB < 1
b. bA = 0; bB < 0
c. bA = 0; bB > +1
d. bA = 1; bB < 0
Consider the following annual returns for Stocks A and B and the Market over the past four years. Which answer best describes the historical betas for Stocks A and B?
| Years | Market | Stock A | Stock B |
| 2018 | 0.03 | 0.10 | -0.17 |
| 2019 | 0.02 | 0.10 | -0.05 |
| 2020 | -0.02 | 0.10 | 0.11 |
| 2021 | 0.01 | 0.10 | -0.02 |
| a. | bA = 1; bB < 1 | |
| b. | bA = 0; bB < 0 | |
| c. | bA = 0; bB > +1 | |
| d. | bA = 1; bB < 0 |
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