Ask Question
15 November, 22:25

The common stock of Blasco Books has a standard deviation of 16.4 percent as compared to the market standard deviation of 12.7 percent. The covariance of this stock with the market is. 0217. What is the beta of Blasco Books' stock?

+5
Answers (1)
  1. 15 November, 22:31
    0
    1.35

    Explanation:

    For determining the beta first we have to compute the correlation which is shown below:

    = Market standard deviation : common stock standard deviation * covariance

    = 16.4% : 12.7% * 0.217

    = 1.04187

    Now the beta of the stock is

    = correlation * Market standard deviation : common stock standard deviation

    = 1.04187 * 16.4% : 12.7%

    = 1.35

    We simply applied the above formulas
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The common stock of Blasco Books has a standard deviation of 16.4 percent as compared to the market standard deviation of 12.7 percent. The ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers