Which of the following statements about the beta coefficient is not true? A) A beta of 1 implies that the stock's volatility is greater than that of the market. B) A beta of

Question

Which of the following statements about the beta coefficient is not true?
A) A beta of > 1 implies that the stock's volatility is greater than that of the market.
B) A beta of < 0 implies that the stock tends to move against the market.
C) A beta of 1 implies a volatility equal to that of the market.
D) All of the above are true.

Quizplus · Accepted Answer

All of the statements are true. A beta coefficient measures the volatility of a stock compared to the overall market. A beta of > 1 implies that it is more volatile than the market, while a beta of < 0 means it moves in the opposite direction of the market. A beta of 1 indicates that the volatility of the stock is equal to that of the market.

Which of the Following Statements About the Beta Coefficient Is