Answer to Question #147894 in Finance for Maya Abdallah

Question

If the beta of the market index is 1.0 and the standard deviation of the market index increases from 12% to 18%, what is the new beta of the market index?

a. 0.33

b. 0.67

c. 1.4

d. 1

e. 1.33

Answer 1

Beta of Market remains same irrespective of the standard deviation of the market.

Hence Option b Beta = 1.0