Question

The average of the betas for all stocks is:______.

A. exactly 1.0; these stocks represent the market.
B. unknown; betas are continually changing
C. greater than 1.0; most stocks are aggressive
D. less than 1.0; most stocks are defensive.

Answer 1

A. exactly 1.0; these stocks represent the market.

Step-by-step explanation:

Beta measures volatility when it comes to stocks. It determines risk profile of that stock. Betas are ranked base on how they deviate. If it is less than the market it is less than 1.0 showing less volatility, if more it is more than 1.0 and it shows more volatility.

The average of the betas for all stocks is exactly 1.0