Market risk refers to the tendency of a stock to move with the general stock market. A stock with above average market risk will tend to be more volatile than an average stock, and its beta will be greater.

True

False

Answer: True. Market risk refers to the tendency of a stock to move with the general stock market. A stock with above average market risk will tend to be more volatile than an average stock, and its beta will be greater.

Explanation: If a stock has a beta that is greater than 1, there is a higher risk for the stock. High risk stocks have a higher potential for return, but are also easier to lose funds from.