The benchmark for a well$-$diversified stock portfolio is the market portfolio, which is a portfolio containing all stocks. The relevant risk of an individual stock is measured by its beta coefficient, which is defined under the Capital Asset Pricing Model $($CAPM$)$ as the amount of risk that the stock contributes to the well$-$diversified portfolio. Based on your understanding of the CAPM and beta, answer the following question:

Which of the following is the correct definition of beta coefficient of stock i$,$ bi

$?$

The Standard Deviation of Stock i$$s Return x The Correlation Between Stock i$$s Return and the Market Return

The Standard Deviation of Stock i$$s Return$/$The Standard Deviation of the Market Return

$($The Standard Deviation of Stock i$$s Return$/$The Standard Deviation of the Market Return$)$ x The Correlation Between Stock i$$s Return and the Market Return