Final answer:
The beta of Pomelo Inc, which measures its volatility relative to the market, is 1.670 as derived from the regression output.
Step-by-step explanation:
The beta of Pomelo Inc is determined by interpreting the regression output formula ri = 3.146 + 1.670rm. In this formula, ri represents the return on the stock, and rm represents the return on the market portfolio.
The coefficient standing next to rm, which is 1.670 in this case, is the beta of Pomelo Inc.
Beta measures the volatility of a stock's returns relative to the volatility of the market returns, and a beta of 1.670 indicates that Pomelo Inc is more volatile than the market.