Question

A beta of 0.5 for a security indicates Group of answer choices the security has no market risk. the security has above average market risk. the security has above average company-unique risk. the security has below average company-unique risk. the security has below average market risk.

Answer 1

the security has below average market risk.

Step-by-step explanation:

As we know that the beta is the systematic risk i.e. market risk of the stock.

if we assume that the average risk in the market is 1 so the beta of the market or market beta is the average risk

Now if the beta of the stock is less than 1 i.e. 0.5 so it is below the average risk of the market

Hence, the correct option is d.