The Beta of a Security Measures Its ________ Due to Market

question 83

Multiple Choice

The beta of a security measures its ________ due to market risk relative to the market as a whole.

• A) return
• B) volatility
• C) profitability
• D) performance

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Definitions:

Risk Tolerance

An individual's or financial entity's capacity to endure loss or volatility in investment value while attempting to achieve investing goals.

Weighted Average Cost

A calculation that takes into account the various costs of goods based on their relative weights, to arrive at an average cost per unit.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits that could have been received but were sacrificed in the pursuit of another option.