A portfolio with a beta of 1.26
A) is 126% more risky than the overall market.
B) has less risk than the lowest risk security held within that portfolio.
C) is 26% more risky than a risk-free asset.
D) is considerably more risky than the overall market.

Question

Quizplus · Accepted Answer

A portfolio's beta measures its volatility relative to the market. A beta of 1.26 means the portfolio is 26% more volatile than the market, not 126% more risky, making it considerably more risky than the market.

A Portfolio with a Beta of 1.26