Risk measures · Question 10 of 12
What does a beta of 1.5 of a share against its benchmark index indicate?
1 answer is correct. Medium
Show answer
Answer
- A The share has so far reacted on average 1.5 times as strongly as the index
Explanation
Beta measures a share's sensitivity to the market. With a beta of 1.5, the share rose on average by 1.5% when the index gained 1%, and fell correspondingly more. A beta below 1 tends to indicate defensive stocks.