Studies have shown the beta is more stable for portfolios than for individual securities.

Question

Quizplus · Accepted Answer

This statement is true. Beta is a measure of systematic risk, which means it measures the sensitivity of a security or portfolio to movements in the overall market. When measuring the beta of a portfolio, diversification across multiple securities can help to reduce the impact of individual securities' ups and downs, leading to a more stable beta measurement for the portfolio as a whole.

Studies Have Shown the Beta Is More Stable for Portfolios