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A stock's contribution to the market risk of a well-diversified portfolio is called risk. It can be measured by a metric called the beta coeffident,
A stock's contribution to the market risk of a well-diversified portfolio is called risk. It can be measured by a metric called the beta coeffident, which calculates the degree to which a stock moves with the movements in the market. Based on your understanding of the beta coeflioent, indicate whether each statement in the following table is true or false: \begin{tabular}{|l|} \hline Statement \\ Over time, a stock with a beta of 1.0 produces a return that goes up and down with a 1:1 relationstip with the retum on the \\ market. \\ \hline Beta measures the volatility in stock movements relative to the market. \\ \hline A stock that is more volatile than the market will have a beta of less than 1.0 . \\ \hline \end{tabular}
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