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What is the meaning of the term beta and how is the beta of a stock measured?

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What is the meaning of the term beta and how is the beta of a stock measured?
posted Jul 10, 2017 by Deepak Jangid

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Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which calculates the expected return of an asset based on its beta and expected market returns. Beta is also known as the beta coefficient.

Beta of a stock measured

Beta is a measure of a stock's volatility in relation to the market. By definition, the market has a beta of 1.0, and individual stocks are ranked according to how much they deviate from the market. A stock that swings more than the market over time has a beta above 1.0.

answer Jul 11, 2017 by Shubham Rajput
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