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UPSC 2023: In the context of finance, the term ‘beta’ refers to
(a)the process of simultaneous buying and selling of an asset from different 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
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Not attemptedCorrect Answer: (d) a numeric value that measures the fluctuations of a stock to changes in the overall stock market
In modern portfolio theory, beta is the slope of a stock’s return against the market return; it quantifies how much the stock’s price fluctuates for a given market move, i.e., its systematic (market) risk. It is not an arbitrage trade, an active balancing strategy, or a description of basis/hedging risk. ([investopedia.com](https://www.investopedia.com/investing/beta-know-risk/?utm_source=openai))
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Frequently Asked Questions
What is the correct answer to this UPSC 2023 Indian Economy question?▼
The correct answer is option (d): a numeric value that measures the fluctuations of a stock to changes in the overall stock market. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Financial Markets & Capital Markets question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2023, GS Paper 1, as Question 73. It falls under Indian Economy > Financial Markets & Capital Markets.
What is the difficulty level of this UPSC question?▼
This question is rated "easy". It tests basic recall and most well-prepared aspirants should answer it correctly.
How many UPSC Prelims questions have been asked from Financial Markets & Capital Markets?▼
UPSC has asked 39 questions from Financial Markets & Capital Markets (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.