QUESTION 23 Which of the following best describes the calculation of the beta fo

Question

QUESTION 23 Which of the following best describes the calculation of the beta for two stocks? O Regress the two correlation of returns for each of the two stocks against the market index in a single regression equation. The betas O Regress the two correlation of returns for each of the two stocks against the market index in two separate regression equations. The O Find the correlation of returns compared to a proxy for the risk-free asset for the two stocks first, and then regress the correlation for for the two stocks are the two slope coefficients in the regression equatiorn. betas for the two stocks are the two slope coefficients in each of the regression equations. each of the two stocks against the returns of the market index in two individual regression equations. The betas for the two stocks are the two individual slope coefficients. O Regress the returns for each stock against the returns for the market index in two separate regressions. The betas are the slope coefficients in each separate regression.

Explanation / Answer

option d is correct

Regress the returns for each stock against the returns for the market index in two seperate regressions.The betas are the slope coefficients in each seperate regression.

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