AMZN's standard deviation is 70% and the market's standard deviation is 20%. The correlation of AMZN...
AMZN's standard deviation is 70% and the market's standard deviation is 20%. The correlation of AMZN with the market is 0.6. What is AMZN's beta? 0.17 0.84 2.1 2.2
Homework Answers
Answer is 2.10
Standard Deviation of AMZN = 0.70
Standard Deviation of Market = 0.20
Correlation of AMZN with Market = 0.60
Beta of AMZN = Correlation of AMZN with Market * Standard
Deviation of AMZN / Standard Deviation of Market
Beta of AMZN = 0.60 * 0.70 / 0.20
Beta of AMZN = 0.42 / 0.20
Beta of AMZN = 2.10
So, beta of AMZN is 2.10
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