explain the concept of the world beta of a

Question

Explain the concept of the world beta of a security.

Answer:  The world beta calculates the sensitivity of returns to a security to returns to the world market portfolio. It is a compute of the systematic risk of the security in a global setting. Statistically, the world beta can be illustrated as:

                 Cov(R_i, R_M)/Var(R_M),

In which R_i and R_M are returns to the I-th security and the world market portfolio, correspondingly.