Economy
2023
Basic Economic Terms
In the context of finance, the term ‘beta’ refers to
C.a type of systemic risk that arises where perfect hedging is not possible
B.an investment strategy of a portfolio manager to balance risk versus reward
D.a numeric value that measures the fluctuations of a stock to changes in the overall stock market.
A.the process of simultaneous buying and selling of an asset from different platforms
Correct Answer: Option D
Beta (β) is a measure of the volatility or systematic risk of a security or portfolio in comparison to the overall stock market.
A beta value greater than 1 indicates a high beta stock, which is considered volatile, meaning its price is significantly affected by fluctuations in the market.
A beta value less than 1 indicates a low beta stock, which is considered more stable than the market average.
Hence, option d is the correct answer.
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