Which of the following statements about the beta coefficient is false: A stock\'

Question

Which of the following statements about the beta coefficient is false: A stock's beta coefficient measures rts volatility relative to the market portfolio A stock's beta coefficient can be estimated by plotting the stock's returns versus the market portfolio's returns. A stock's reported beta coefficient is based on forecasted future volatility. A stock with a beta coefficient greater than 1.0 ts said to be nskier than the market portfolio Using the capital asset pricing model, a stock with a beta coefficient less than 1.0 would have a required rate of return that is lower than the requred rate of return on the market portfolio.

Explanation / Answer

Answer

A stock's beta coefficient can be estimated by plotting the stock's returns versus the market portfolio's returns.

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