What does the 'beta' of an asset measure?

Question

Quizplus · Accepted Answer

The beta of an asset measures how the nondiversifiable risk of that asset compares with that of the market portfolio. Specifically, a beta of 1 indicates that the asset has the same level of nondiversifiable risk as the market portfolio, while a beta greater than 1 suggests higher nondiversifiable risk and a beta less than 1 suggests lower nondiversifiable risk. The beta does not directly measure expected return or diversifiable risk.

What Does the 'Beta' of an Asset Measure