[amp_mcq option1=”coefficient of market” option2=”relative to market” option3=”irrelative to market” option4=”same with market” correct=”option2″]<\/p>\n
The correct answer is: B. relative to market<\/strong><\/p>\n Beta is a measure of a stock’s volatility relative to the market. A beta of 1 means that the stock’s price moves in the same direction as the market. A beta of less than 1 means that the stock is less volatile than the market, and a beta of greater than 1 means that the stock is more volatile than the market.<\/p>\n For example, if a stock has a beta of 1.5, it means that the stock is 50% more volatile than the market. This means that if the market goes up by 10%, the stock is expected to go up by 15%. Conversely, if the market goes down by 10%, the stock is expected to go down by 15%.<\/p>\n Beta is a useful tool for investors to use when trying to understand the risk of a stock. A stock with a high beta is considered to be a riskier investment than a stock with a low beta. Investors who are looking for more conservative investments should avoid stocks with high betas.<\/p>\n Here is a brief explanation of each option:<\/p>\n This is not a correct answer because beta is not a coefficient of the market. Beta is a measure of a stock’s volatility relative to the market.<\/p>\n This is the correct answer because beta measures a stock’s volatility relative to the market.<\/p>\n This is not a correct answer because beta is a measure of a stock’s volatility relative to the market.<\/p>\n This is not a correct answer because beta measures a stock’s volatility relative to the market. A stock with a beta of 1 moves in the same direction as the market, but a stock with a beta of 2 moves twice as much as the market.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”coefficient of market” option2=”relative to market” option3=”irrelative to market” option4=”same with market” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-43981","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n\n
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