CAPM stock beta
economic stock beta
CAPM portfolio beta
CAPM realized beta
Answer is Right!
Answer is Wrong!
The correct answer is A. CAPM stock beta.
The CAPM stock beta is a measure of the systematic risk of a stock. It is calculated as the covariance of the stock’s returns with the market portfolio’s returns, divided by the variance of the market portfolio’s returns.
The CAPM stock beta is used to estimate the expected return of a stock. The higher the CAPM stock beta, the higher the expected return of the stock.
The other options are incorrect because they are not measures of systematic risk.
- Economic stock beta is a measure of the non-systematic risk of a stock.
- CAPM portfolio beta is a measure of the systematic risk of a portfolio.
- CAPM realized beta is a measure of the realized systematic risk of a stock.
The CAPM stock beta is the most commonly used measure of systematic risk. It is used by investors to estimate the expected return of a stock and to construct portfolios that are diversified against systematic risk.