Which of the following statements regarding beta is true?
A) Beta is an absolute measure of risk.
B) Beta is a relative measure of risk.
C) Beta is a abstract measure of risk.
D) Beta is a geometric measure of risk.

Question

Quizplus · Accepted Answer

Beta is a relative measure of risk that compares the volatility of an asset or portfolio to the market as a whole. It is used in the Capital Asset Pricing Model (CAPM) to determine the expected return of an investment based on its beta and the expected market returns.

Which of the Following Statements Regarding Beta Is True