If a stock's monthly return is consistently positive when the market's monthly return is negative, and vice-versa, then the beta of the company's stock will likely be:
A) zero.
B) negative.
C) positive.
D) very high.

Question

Quizplus · Accepted Answer

Beta measures the sensitivity of a stock's returns to the returns of the market. A negative beta indicates that the stock's returns move in the opposite direction of the market's returns, which is described in the scenario.

If a Stock's Monthly Return Is Consistently Positive When the Market's