When analyzing systematic risk of a stock,if the slope of the regression line is greater than 1,________.
A)the stock return exceeds market return
B)the market return and stock return move equally
C)the stock return increases at a slower rate than market
D)the stock return and market return are uncorrelated

Question

Quizplus · Accepted Answer

The slope of the regression line in the context of stock market analysis is known as the beta (β). A beta greater than 1 indicates that the stock's return is expected to be more volatile than the market, meaning it would exceed the market return when the market performs well.

When Analyzing Systematic Risk of a Stock,if the Slope of the Regression