Use the following three statements to answer this question:
I.Beta is constant over time.
II.Empirically beta is never negative.
III.Negative beta implies a negative standard deviation.
A)I, II and III are correct.
B)I, II and III are incorrect.
C)I is correct, II and III are incorrect.
D)I, II are incorrect, III is correct.

Question

Quizplus · Accepted Answer

I is incorrect because beta can change over time due to various factors such as changes in a company's operations or changes in the market. II is incorrect because beta can be negative, indicating that the asset moves in the opposite direction of the market. III is incorrect because beta is a measure of volatility relative to the market, not standard deviation; a negative beta does not imply a negative standard deviation, as standard deviation cannot be negative.

Use the Following Three Statements to Answer This Question