A stock's beta coefficient is developed by plotting the historical relationship between the stock's return and the market's return.

Question

Quizplus · Accepted Answer

A stock's beta coefficient is calculated by measuring the sensitivity of its returns to the overall market's returns. It is developed by plotting the stock's historical returns against those of the market, usually represented by a market index such as the S&P 500.

A Stock's Beta Coefficient Is Developed by Plotting the Historical