Explanation:
With a correlation coefficient, the portfolio beta is computed as follows:
(Book 1, Module 5.2, LO 5.f)
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Question 34
A portfolio analyst determines that the correlation of a portfolio with the market index is 0.7, the volatility of the portfolio return is 9%, and the volatility of the market index return is 6%. Based on these measures, what should the portfolio analyst compute as the portfolio's beta?
A
0.38.
B
0.47.
C
1.05.
D
1.50.
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