A measure of a stock's degree of risk is its______ .

Question

Quizplus · Accepted Answer

Beta is a measure of a stock's volatility in relation to the overall market. It indicates how much the price of a stock tends to move with the market. A beta of 1 means the stock's price moves in tandem with the market, while a beta above 1 indicates the stock is more volatile than the market and a beta below 1 indicates the stock is less volatile. Therefore, beta is a good measure of a stock's degree of risk.

A Measure of a Stock's Degree of Risk Is Its______