The higher an asset's beta,
A) the lower the expected return will be in an up market.
B) the more responsive it is to changing market returns.
C) the less responsive it is to changing market returns.
D) the higher the expected return will be in a down market.

Question

Quizplus · Accepted Answer

Beta measures an asset's sensitivity to market returns. A higher beta indicates that the asset is more responsive to changes in the market, meaning its returns will fluctuate more in response to market movements.

The Higher an Asset's Beta