Assume an asset has a positive covariance with the market. The beta of the asset is:
A) equal to one.
B) greater than one.
C) less than one.
D) greater than zero.
E) less than zero.

Question

Quizplus · Accepted Answer

Beta is calculated as the covariance of the asset with the market divided by the variance of the market. A positive covariance indicates that the beta will be greater than zero.

Assume an Asset Has a Positive Covariance with the Market