What is Beta?

Understand the Problem

The question is asking for the definition or meaning of the term 'Beta,' and it presents multiple choice options related to different contexts where the term may apply.

Answer

Volatility & Correlation

Beta most commonly refers to volatility and correlation in finance, not the other options.

More Information

Beta in finance measures a stock's volatility relative to the market. It’s an indicator of systematic risk.

Tips

A common mistake is confusing the term with unrelated colloquial uses or strategies.

Sources

What Beta Means for Investors - Investopedia - investopedia.com
Beta (finance) - Wikipedia - en.wikipedia.org
Beta - What is Beta (β) in Finance? Guide and Examples - corporatefinanceinstitute.com

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