Which of the Following Does NOT Describe Beta

question 12

Multiple Choice

Which of the following does NOT describe beta?

• A) A measure of the sensitivity of the return on an asset to the return on an index
• B) The slope of the best fit line when the return on an asset is regressed against the return on the market
• C) The hedge ratio necessary to remove market risk from a portfolio
• D) Measures correlation between futures prices and spot prices

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Definitions:

Coefficient Of Correlation

A statistical measure that calculates the strength and direction of a linear relationship between two variables; its value ranges from -1 to 1.

Variation

is a measure of the spread of data points in a dataset from the mean or another central value.

Test Statistic

A calculated value used in statistical testing to determine whether to reject the null hypothesis of a study.

Hypotheses

Statements made for testing and analysis, which can either be supported or refuted through experimentation or observation.