The beta coefficient is a measure of:
A)the relationship between the return of an individual stock and the return on the market.
B)the relationship between the return on a stock and the return on the portfolio.
C)the relationship between the portfolio risk and the market risk.
D)None of the above

Question

Quizplus · Accepted Answer

The beta coefficient measures the volatility or risk of an individual stock in relation to the overall market. Specifically, it represents the degree to which the return of a stock moves in response to changes in the stock market as a whole. Therefore, option A is the correct choice. Option B is incorrect because it refers to a stock's relationship with its portfolio, rather than the market. Option C is incorrect because it describes the relationship between portfolio risk and market risk, rather than the beta coefficient. Option D is incorrect because there is a correct answer choice.

The Beta Coefficient Is a Measure Of