Beta is defined as the:
A) Slope of the security market line.
B) Amount of systematic risk in a risky asset relative to that in an average asset.
C) Ratio of unsystematic risk in a risky asset relative to the systematic risk in the overall market.
D) Ratio of the total risk in a risky asset relative to the systematic risk in the overall market.
E) Amount of systematic risk in a risky asset relative to that of a risk-free asset.

Question

Quizplus · Accepted Answer

Beta measures the amount of systematic risk in a risky asset relative to that in an average asset, not unsystematic risk or total risk. It does not compare risk to a risk-free asset.

Beta Is Defined as The