Beta coefficient is used to measure market risk which is an index of__________?
Correct answer: C. Stock market volatility
- A. Coefficient risk volatility
- B. Market risk volatility
- C. Stock market volatility
- D. Portfolio market portfolio
Explanation
Beta measures a stock's sensitivity to movements in the overall stock market, so it indicates the stock's market-risk volatility relative to the market. It does not measure a firm's total volatility by itself.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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