Under what circumstances would the Beta of the MARKET be a value other than 1.0?

Question

Under what circumstances would the Beta of the MARKET be a value other than 1.0?

a. If prices were more or less risky, the Beta of the Market might be different than 1.0.

b. If historical values do not imply future values, then the Beta of the Market might be different than 1.0.

c. Never, the Beta of the Market will always be 1.0.

d. If people's aversion to risk (Risk Aversion, dislike for taking risk) changes, the Beta of the Market might be different than 1.0.

e. On days ending in "y" (like, as in "MONDAY"), the Beta of the Market might be other than 1.0.

f. If the market is especially volatile (the prices change rapidly), the Beta of the Market might be different than 1.0

g. If the Variance and Standard Deviation of returns are different, then the Beta of the Market might be other than 1.0. h. If the EXPECTED RETURN does not equal the REQUIRED RETURN, then the Beta of the Market might be a value other than 1.0.

Explanation / Answer

f. If the market is especially volatile (the prices change rapidly), the Beta of the Market might be different than 1.0

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