Suppose the market portfolio is equally likely to increase by 19% or decrease by 5%.
a. Calculate the beta of a firm that goes up on average by 50% when the market goes up and goes down by 12% when the market goes down.
b. Calculate the beta of a firm that goes up on average by 10% when the market goes down and goes down by 8% when the market goes up.
c. Calculate the beta of a firm that is expected to go up? 4% independently of the market.