Home › CA Final › strategicfinancialmanagement › Portfolio Management › Beta of a security in the CAPM framework measures:
Beta of a security in the CAPM framework measures:
AThe total variability of the security's returns
BAverage dividend payout of the security
CSensitivity of security returns to market returns
DThe intercept of the security's return line
Answer & Solution
Correct answer: C. Sensitivity of security returns to market returns
1. Identify what the question asks: this concept maps to beta (§4.3.3).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (C).
_Source: ICAI BoS CA Final Paper 2, Ch 6 "Portfolio Management"_
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