The beta coefficient, representing the relationship between the performance of the market and the performance of the stock, is theoretically not sensitive to business-specific risk factors.

Question

Quizplus · Accepted Answer

The beta coefficient only measures the volatility of a stock relative to the market as a whole, and does not take into account any business-specific risk factors. Therefore, it is theoretically not sensitive to such factors.

The Beta Coefficient, Representing the Relationship Between the Performance of the Market