The beta is the expected percent change in the excess return of a security for a 1% change in the ________ of the market portfolio.

Question

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Beta is the measure of a security's sensitivity to market movements. The excess return is the return on the security above the risk-free rate. Therefore, the beta is the expected percent change in the excess return of a security for a 1% change in the excess return of the market portfolio.

The Beta Is the Expected Percent Change in the Excess