Shares with higher betas are usually more stable than shares with lower betas.

Question

Quizplus · Accepted Answer

This statement is false. Shares with higher betas are generally considered to be more volatile or risky compared to shares with lower betas. Beta measures how much a stock's price moves relative to the market as a whole, so a stock with a beta of 1.5 would be expected to move 50% more than the market (as measured by the S&P 500 index) in either direction. Therefore, stocks with higher betas may experience greater price fluctuations and may be considered more volatile.

Shares with Higher Betas Are Usually More Stable Than Shares