Beta measures depend highly on the:
A) direction of the market variance.
B) overall cycle of the market.
C) variance of the market and asset, but not their co-movement.
D) covariance of the security with the market and how they are correlated.
E) All of

Question

Quizplus · Accepted Answer

Beta measures the covariance of a security with the market and how they are correlated. It takes into account the direction of the movement and the strength of the correlation between the security and the market. Beta measures are highly dependent on the covariance and correlation between the market and the asset.

Beta Measures Depend Highly on The