UPSC PYQPrelims 2023

Civil Services Examination · Question 73

In the context of finance, the term 'beta' refers to

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

Answer: (D) a numeric value that measures the fluctuations of a stock to changes in the overall stock market

Explanation

Beta measures a stock's volatility relative to the overall market.