Asked by DANTE ANDERSON on Jul 07, 2024
Verified
Which of the following statements about the beta coefficient is not true?
A) A beta of > 1 implies that the stock's volatility is greater than that of the market.
B) A beta of
C) A beta of 1 implies a volatility equal to that of the market.
D) All of the above are true.
Beta Coefficient
An indicator of the level of fluctuations or systematic risk associated with a particular security or portfolio relative to the overall market.
Volatility
The degree of variation of a trading price series over time, usually measured by the standard deviation of returns.
- Clarify the idea of beta and its role in evaluating the volatility of shares.
Verified Answer
LC
Larone ClarkeJul 10, 2024
Final Answer :
D
Explanation :
All the statements provided about the beta coefficient are true. A beta greater than 1 does imply greater volatility than the market, a beta of 1 implies equal volatility to the market, and thus, all the options are correct statements about the beta coefficient.
Learning Objectives
- Clarify the idea of beta and its role in evaluating the volatility of shares.
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