Beta is needed to estimate the amount of additional reward you will receive for purchasing a risky asset instead of a risk-free asset.

Name: Beta is needed to estimate the amount of additional reward you will receive for purchasing a risky asset instead of a risk-free asset.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Beta measures the volatility of an asset in comparison to the market as a whole, which is used to estimate the risk premium or additional reward expected for investing in a riskier asset over a risk-free asset.

Beta Is Needed to Estimate the Amount of Additional Reward