[Solved] In the context of finance, the term beta' refers to the process of simultaneous buying and selling of an asset from different platforms an investment strategy of a portfolio manager to balance risk versus reward a type of systemic risk that arises where perfect hedging is not possible a numeric value that measures the fluctuations of a stock to changes in the overall stock market

Q23. In the context of finance, the term beta’ refers to

the process of simultaneous buying and selling of an asset from different platforms
an investment strategy of a portfolio manager to balance risk versus reward
a type of systemic risk that arises where perfect hedging is not possible
a numeric value that measures the fluctuations of a stock to changes in the overall stock market

Answer: 4

· Beta is used for CAPM (Capital Asset Pricing Model)

· CAPM describes the relationship between systematic risk and expected return for stocks.

· It is used to calculate the expected returns based on the risks and the cost of capital.

· It provides the investor only an estimate of how much risk the stock will add to the portfolio.

· It measures the expected changes in a stock relative to movements in the market.

· If the beta coefficient is greater than 1, it means that the stock is more volatile than the market

· If beta less than 1, it indicates that the stock has lower volatility than the market