What is the beta of a risk-free asset?
Understand the Problem
The question is asking for the beta coefficient of a risk-free asset, which is a measure of its volatility compared to the market as a whole. In finance, a risk-free asset, such as government bonds, is typically considered to have a beta of 0 because it is not correlated with market fluctuations.
Answer
0
The beta of a risk-free asset is 0
Answer for screen readers
The beta of a risk-free asset is 0
More Information
A risk-free asset, like a treasury bill, has a beta of zero because its returns are not correlated with market returns. This makes it unaffected by market risks.
Sources
- Solved Risk-free assets have a beta of 0 and the market | Chegg.com - chegg.com
- The Beta of a risk-free asset is zero | analystprep.com - analystprep.com
AI-generated content may contain errors. Please verify critical information
Thank you for voting!
