RRaahUPSC
2023 · EconomyPrevious Year Question
Q93.
In the context of finance, the term 'beta' refers to
A. the process of simultaneous buying and selling of an asset from difference platforms.
B. an investment strategy of a portfolio manager to balance risk versus reward.
C. a type of systemic risk that arises where perfect hedging is not possible.
D. a numeric value that measures the fluctuations of a stock to changes in the overall stock market.
Answer

D

Explanation

(β) is a measure of the volatility—or systematic a security or portfolio compared to the market a whole. Equities having a beta value larger than one, high beta stocks, are often known as volatile stocks. slightest adjustments in stock market indicators a big influence on them. A security that is more stable is a low beta stock i.e. has a rating below 1.
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