The Market Risk, Beta, of a Security Is Equal to

question 21

Multiple Choice

The market risk, beta, of a security is equal to

• A) the covariance between the security's return and the market return divided by the variance of the market's returns.
• B) the covariance between the security and market returns divided by the standard deviation of the market's returns.
• C) the variance of the security's returns divided by the covariance between the security and market returns.
• D) the variance of the security's returns divided by the variance of the market's returns.

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Definitions:

Validity

refers to the extent to which a test, tool, or study accurately measures what it's intended to measure.

Free Association

A psychoanalytic technique where patients share thoughts, words, or images that come to mind spontaneously to uncover unconscious thoughts or desires.

Hidden Conflicts

Internal struggles or disagreements that are not apparent or expressed outwardly.

Symptoms

Signs or indicators of a disease, disorder, or other condition, often used in the diagnosis process.