Beta is the slope of the best fit line for the points with coordinates representing the______ and the_____ for each one of several years.
A) rate of return; level of risk for an individual security
B) rate of inflation; rate of return for an individual security
C) risk level of a stock; market rate of return
D) market rate of return; security's rate of return

Question

Quizplus · Accepted Answer

Beta is a measure of a security's volatility in relation to the overall market. The slope of the best fit line (beta) is calculated using the security's rate of return as the dependent variable and the market rate of return as the independent variable.

Beta Is the Slope of the Best Fit Line for the Points