What does beta measure?
A) The level of risk associated with a market segment
B) Covariance between returns on a particular share with the returns of the market as a whole
C) The positive variance between returns on a particular share with the returns of a segment of the market
D) Covariance between two shares

Question

Quizplus · Accepted Answer

Beta measures the covariance between returns on a particular share with the returns of the market as a whole, indicating how much the share's returns are affected by movements in the overall market. It is commonly used as a measure of the level of systematic risk associated with an investment.

What Does Beta Measure