What does beta measure?
A)The amount of business risk the stock is exposed to
B)The amount of market risk the stock is exposed to
C)The amount of credit risk the stock is exposed to
D)The amount of unique risk the stock is exposed to

Question

Quizplus · Accepted Answer

Beta measures the amount of market risk an individual stock is exposed to. It compares the volatility of the stock to the overall market. A beta of 1 suggests that the stock's price will move in lockstep with the market, while a beta greater than 1 indicates the stock is more volatile than the market and a beta less than 1 suggests the stock is less volatile than the market.

What Does Beta Measure