Economics Risk And Return Questions
In the context of the Capital Asset Pricing Model (CAPM), beta is a measure of a stock or portfolio's systematic risk. It quantifies the sensitivity of an asset's returns to the overall market movements. A beta value greater than 1 indicates that the asset is more volatile than the market, while a beta less than 1 suggests lower volatility. Beta helps investors assess the risk associated with an investment and determine its potential return in relation to the market.