A higher beta for an asset reflects
A) lower risk.
B) lower covariance between the asset's returns and market returns.
C) higher covariance between the asset's returns and the market returns.
D) none of the above

Question

Quizplus · Accepted Answer

A higher beta reflects a higher covariance between the asset's returns and the market returns. This means that the asset's returns are more closely tied to movements in the overall market, indicating a higher level of risk.

A Higher Beta for an Asset Reflects