Homework Answers
Beta of the stock represents the chnages of stock price with respect to he movement of market.
Beta > 1 --- Indicates that the security's price tends to be more volatile than the market.
Beta = 1 --- Indicates that the security's price tends to move with the market.
Beta < 1 --- Indicates that the security's price tends to be less volatile than the market.
Beta of the security = ( change in security return / change in market return )
= ( 12.4 - 3.2 ) / ( 16.2 - 2.1 )
= 0.65
Beta of the security THY is less than one, which means it is less volatile than market.
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