In this video, we dive deep into calculating the beta of an individual asset, specifically PepsiCo, using the correlation coefficient and covariance. Beta is a key measure in finance that indicates the sensitivity of an asset's returns to the market's returns. In this case, we explore how to compute PepsiCo's beta when provided with data such as the correlation between PepsiCo and the S&P 500, as well as the variance of both the market and PepsiCo. We begin by breaking down the question step by step, identifying key pieces of information, and selecting the appropriate formula to calculate beta. By leveraging the correlation coefficient, the standard deviation of PepsiCo, and the variance of the market, we walk through the calculations to find the final beta. Along the way, we address how to handle complicated questions, interpret various financial metrics, and apply them to real-world examples. This video aims to enhance your understanding of portfolio theory, beta calculation, and its applications in asset pricing. Whether you're preparing for exams or enhancing your practical finance skills, this video provides a detailed and approachable guide to solving complex beta-related problems in finance. Keep watching to master these concepts and boost your financial analysis expertise!