Question

Which of the following variables do we need to compute the beta for a company's stock?

a) Current assets
b) Market capitalization
c) Total revenue
d) Systematic risk

Answer 1

To compute the beta for a company's stock, we need to consider the variable of systematic risk.

Step-by-step explanation:

In order to compute the beta for a company's stock, we need to consider the variable of systematic risk. Beta measures the sensitivity of a stock's returns to the overall market returns, and systematic risk captures this market risk. The other variables mentioned, such as current assets, market capitalization, and total revenue, do not directly contribute to the calculation of beta.