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

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

Solution

Per the official UPSC key, the answer is B. The textbook definition of beta matches option D; UPSC officially marked B.

Asked in: UPSC Prelims 2023

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