Stocks with higher betas are usually more stable than stocks with lower betas.

Question

Quizplus · Accepted Answer

This statement is false. Stocks with higher betas are usually more volatile or risky than stocks with lower betas. Beta is a measure of a stock's volatility in relation to the overall market. A beta of 1 indicates that the stock's price tends to move in line with the market, while a beta greater than 1 indicates that the stock is more volatile than the market, and a beta less than 1 indicates that the stock is less volatile than the market.

Stocks with Higher Betas Are Usually More Stable Than Stocks