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An Asset in the Australian Market Has a Consumption Beta 45% 45 \%

Question 18

Multiple Choice

An asset in the Australian market has a consumption beta of 3.0.If the variance of the asset is 20% and the variance of the growth rate in consumption is 12.5%,what is the asset's covariance with the growth rate in consumption?


A) 45% 45 \%
B) 37.5% 37.5 \%
C) 15% 15 \%
D) 60% 60 \%

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