Which of the following statements is most correct regarding beta?
A) Beta must be calculated using at least 5 years of monthly returns data to be accurate.
B) Beta can only be measured properly using daily returns.
C) Beta for a particular company remains constant over time.
D) Even professionals may not agree on the measurement of beta.

Question

Quizplus · Accepted Answer

Beta is a measure of a stock's volatility in relation to the market, and its calculation can vary depending on the data used and the methodology applied. As a result, even professionals may disagree on the measurement of beta. Therefore, option D is the most correct statement. Options A and B are incorrect because beta can be calculated using different time intervals and frequencies, although longer intervals may provide more accurate estimates. Option C is also incorrect because beta can change over time as a result of changes in the underlying market or industry conditions.

Which of the Following Statements Is Most Correct Regarding Beta