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Investment term of the day: beta



In finance the beta of an investment is a measure of the risk arising from exposure to general market movements.

It can be used to measure the volatility of a single security or a portfolio in comparison to the market as a whole.

If a measure of one is given, it indicates the security’s price will move with the market. A number greater than one indicates the security’s price is more volatile than the market and a number less than one indicates greater stability.

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