The principal measure of non-diversifiable risk included in the CAPM formula is the beta coefficient....
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The principal measure of non-diversifiable risk included in the CAPM formula is the beta coefficient. The beta coefficient measures the volatility or risk inherent in an investment by:
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Computing the ratio of changes in earnings per share to changes in sales.
Computing the ratio of stock price to earnings per share.
Computing the ratio of percentage changes in a stock's price to percentage changes in overall market values during the same period.
Computing the ratio of percentage changes in the expected value of alpha equivalents to derivative fluctuations.
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