When evaluating stock performance, ____ measures variability that is systematically related to market returns; ____ measures total variability of a stock's returns.
A)beta; standard deviation
B)standard deviation; beta
C)intercept; beta
D)beta; error term

Question

Quizplus · Accepted Answer

Beta measures the systematic risk related to the overall market returns, while standard deviation measures the total variability in a stock's returns, including both systematic and unsystematic risk.

When Evaluating Stock Performance, ____ Measures Variability That Is Systematically