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All of the following are true regarding beta except:

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All of the following are true regarding beta except:

 Options:

A. it is widely used with portfolios of common stock
B. it measures the volatility of returns relative to the expected value
C. it is an important component of the Capital Asset Pricing Model (CAPM)
D. the higher the beta, the greater the risk level

 

The Correct Answer Is:

  • B. it measures the volatility of returns relative to the expected value

 

Conclusion

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