How would you describe beta? How does beta assist in identifying the different levels of risk? When would you use beta?© BrainMass Inc. brainmass.com June 3, 2020, 10:26 pm ad1c9bdddf
Beta is a measure of systematic risk and is measured using the covariance of a securities return with the market in relation to the variance in market returns. Beta measures the risk of a security which cannot be diversified away. A security with beta greater than 1 is more risky that the market and a security with beta less than 1 is less risky than the market.
Beta helps in identifying different levels of risk ...
This 331 word solution explains how beta is used in identifying the different levels of risk.