meaning of beta

Question

Question

Explain the meaning of beta

finance

Answer 1

Answer #1

Risk Means deviation from expected ret. It is measured with "SD".

SD specifies Total Risk.

Total Risk can be classified into two

1. Systematic Risk - Risk associated with Market. It is measured with Beta. It can't be diversified.

2. Unsystematic Risk - Risk that is organization specific. It can be diversified with proper diversification techniques.

Beta specifies no. of times of systematic risk of stock compared with Market systematic risk.

The beta of the market is always "1".

answered by: Org

Answer 2

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