Question:

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

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Market indices like Nifty 50 have a beta of 1, representing average market risk.
  • 0.5
  • 1
  • 1.5
  • 2
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The Correct Option is B

Solution and Explanation

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.
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