In the Capital Asset Pricing Model (CAPM),the term Beta, $\beta$ ,is:
A) a measure of unsystematic risk inherent in a security.
B) calculated as the "covariance of future returns between a specific security and the market portfolio" divided by the "standard deviation of returns of the market portfolio".
C) a measure of systematic risk enclosed with a security.
D) None of these.

Question

Quizplus · Accepted Answer

Beta ($\beta$) in the CAPM is a measure of systematic risk, which is the risk inherent to the entire market or market segment. It reflects how much the price of a security is expected to move relative to the market.

In the Capital Asset Pricing Model (CAPM),the Term Beta β\betaβ ,Is: A) a Measure of Unsystematic Risk Inherent in a ,Is

In the Capital Asset Pricing Model (CAPM),the Term Beta $\beta$ ,Is:
A) a Measure of Unsystematic Risk Inherent in a ,Is