Which of the following statements is NOT true regarding beta?
A) Beta will have a value of less than 1.0 if the firm's returns are less volatile than the market.
B) Beta will have a value of greater than 1.0 if the firm's returns are more volatile than the market.
C) Beta will have a value of equal to 1.0 if the firm's returns are of equal volatility to the market.
D) All of the statements above are true.

Question

Quizplus · Accepted Answer

All the statements provided accurately describe the behavior of beta in relation to a firm's returns and their volatility compared to the market. Beta is a measure of a stock's volatility in relation to the overall market. A beta less than 1 indicates less volatility than the market, a beta greater than 1 indicates more volatility than the market, and a beta of 1 indicates volatility equal to the market.

Which of the Following Statements Is NOT True Regarding Beta