The risk-free security has a beta equal to, while the market portfolio's beta is equal to:
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A. B. C. D.C
The beta of a security measures its sensitivity to changes in the returns of the overall market. A beta of 1 indicates that the security's returns move in line with the market, while a beta greater than 1 suggests that the security is more volatile than the market and a beta less than 1 implies that it is less volatile.
The risk-free security has a beta equal to zero since its returns are not affected by changes in the market. The market portfolio's beta is by definition equal to 1 since it represents the overall market, which is used as the benchmark for measuring beta.
Therefore, the correct answer is (C) zero; one.