A stock with a covariance with the market higher than the variance of the market will always high a beta above 1.0.

Question

Quizplus · Accepted Answer

Beta is calculated as the covariance between the returns of an asset and the returns of the market divided by the variance of the market. A stock with a higher covariance than the market's variance will have a beta greater than 1.0, indicating that the stock is more volatile than the market.

A Stock with a Covariance with the Market Higher Than