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The standard deviation of stock returns for Stock...

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The standard deviation of stock returns for Stock A is 30%. The standard deviation of the market return is 20% and the correlation between stock A and the market is 0.75. In a bull market with rapidly increasing stock prices, will stock A likely outperform or underperform the average stock? Why?,This following is what I put for the answer. It seems very weak, and I have done a ton of research to better answer this. I am at a loss... In a bull market Stock A will likely outperofmr the average stock becuase it has a beta of 1.125. The beta is greater than the equilibrium of 1.0.,Thank you!,Thank you. I have done the majority of the work for the Caravan Company, however, I am not confident that I am correct. I will attach the work for your input.

 

Paper#5452 | Written in 18-Jul-2015

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