The Beta for a security is an alternative way of representing its
A) standard deviation.
B) riskfree return.
C) expected rate of return.
D) covariance with the market.

Question

Quizplus · Accepted Answer

Beta is a measure of a security's covariance with the market. It measures how movements in the market affect the security's price. Therefore, the correct answer is D. Option A (standard deviation) is a measure of a security's volatility, while option B (risk-free return) is the return an investor can earn by investing in a risk-free security. Option C (expected rate of return) is the return the investor expects to earn from the security.

The Beta for a Security Is an Alternative Way of Representing