Which of the following statements about a stock's beta is true?
A) Stocks with betas of less than 2.0 have low price volatility.
B) High-beta stocks are relatively conservative investments.
C) The higher the beta, the more confidences that investors are presumed to have in a given security.
D) Most stock betas are positive.
E) Stocks with positive betas are considered to be highly volatile.

Question

Quizplus · Accepted Answer

Most stock betas are positive, indicating that the stock's returns generally move in the same direction as the market. A positive beta means that the stock tends to increase in value when the market goes up and decrease when the market goes down. This is a fundamental concept in finance related to the Capital Asset Pricing Model (CAPM), which describes the relationship between systematic risk and expected return for assets, particularly stocks.

Which of the Following Statements About a Stock's Beta Is