You are given the following information concerning a stock and the market Year 2017 2018 2019 2020 2021 2022 Returns Market 18% 11 12 Correlation -14 37 15 Average return Standard deviation Beta Stock 34% 27 3 a. Calculate the average return and standard deviation for the market and the stock. Note: Use Excel to complete the problem. Enter your answers as a percent rounded to 2 decimal places. -21 16 22 Market Stock b. Calculate the correlation between the stock and the market, as well as the stock's beta. Note: Use Excel to complete the problem. Round your correlation answer to 2 decimal places and beta answer to 4 decimal places. % %

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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You are given the following information concerning a stock and the market
Year
2017
2018
2019
2020
2021
2022
Returns
Market
18%
11
12
-14
37
15
Correlation
Beta
a. Calculate the average return and standard deviation for the market and the stock.
Note: Use Excel to complete the problem. Enter your answers as a percent rounded to 2 decimal places.
Average return
Standard deviation
Stock
34%
27
3
-21
16
22
Market
%
Stock
%
%
b. Calculate the correlation between the stock and the market, as well as the stock's beta.
Note: Use Excel to complete the problem. Round your correlation answer to 2 decimal places and beta answer to 4 decimal
places.
Transcribed Image Text:You are given the following information concerning a stock and the market Year 2017 2018 2019 2020 2021 2022 Returns Market 18% 11 12 -14 37 15 Correlation Beta a. Calculate the average return and standard deviation for the market and the stock. Note: Use Excel to complete the problem. Enter your answers as a percent rounded to 2 decimal places. Average return Standard deviation Stock 34% 27 3 -21 16 22 Market % Stock % % b. Calculate the correlation between the stock and the market, as well as the stock's beta. Note: Use Excel to complete the problem. Round your correlation answer to 2 decimal places and beta answer to 4 decimal places.
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