Question

The index, such as Nifty 50, typically has a beta of _____

• A. 0.5
• B. 1
• C. 1.5
• D. 2

Hint:

Market indices like Nifty 50 have a beta of 1, representing average market risk.

Answer 1

The Correct Option is B

In finance, beta measures the volatility or systematic risk of a security or portfolio compared to the overall market.
Since an index like Nifty 50 represents the overall market or a broad market segment, it is assigned a beta of 1 by definition.
- A beta of 1 means the index's price tends to move in line with the market. - Stocks with beta greater than 1 are more volatile than the market. - Stocks with beta less than 1 are less volatile.