[amp_mcq option1=”high beta, less risky” option2=”low beta, more risky” option3=”high beta, more risky” option4=”low beta, less risky” correct=”option3″]<\/p>\n
The correct answer is: C. high beta, more risky.<\/p>\n
Beta is a measure of a stock’s volatility relative to the market. A stock with a beta of 1 has the same volatility as the market, a stock with a beta of 2 is twice as volatile as the market, and a stock with a beta of 0.5 is half as volatile as the market.<\/p>\n
A stock with a higher beta is more risky because it is more volatile than the market. This means that it is more likely to go up or down in price, and the potential for losses is greater.<\/p>\n
A stock with a lower beta is less risky because it is less volatile than the market. This means that it is less likely to go up or down in price, and the potential for losses is lower.<\/p>\n
Here is a table that summarizes the relationship between beta and risk:<\/p>\n
| Beta | Volatility | Risk |
\n|—|—|—|
\n| High | High | High |
\n| Low | Low | Low |<\/p>\n
I hope this helps!<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”high beta, less risky” option2=”low beta, more risky” option3=”high beta, more risky” option4=”low beta, less risky” correct=”option3″]<\/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-44334","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n