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Understanding the Beta Coefficient in Finance Quiz

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1. What does the beta coefficient measure in financial analysis?

2. How does the value of the beta coefficient interpret the risk of an investment?

3. What is meant by a negative beta coefficient in finance?

4. In terms of beta coefficient, what type of assets would a conservative investor prefer?

5. Which model uses the beta coefficient to determine the expected return of an investment?

6. In financial analysis, how is the beta coefficient generally calculated?

7. An investment has a beta of 1.3, what does this imply?

8. If the market return decreases by 2% and a stock with a beta of 0.5 increases by 1%, is the stock following its expected behavior according to its beta?

9. Can a beta coefficient be used to evaluate non-traded assets, like a private company?

10. Which type of risk does the beta coefficient not take into account?