In the context of finance, the term 'beta' refers to
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Answer: D. Beta measures how much a stock's price moves compared with the whole market. A beta of 1 moves with the market; above 1 is more volatile, below 1 is less.
Watch for: Beta is linked to risk, so options about risk look tempting; it is a number, not a strategy.
Why the other options are wrong
- A. Wrong because buying and selling across platforms is arbitrage.
- B. Wrong because balancing risk and reward is asset allocation, not beta.
- C. Wrong because risk from imperfect hedging is basis risk, not beta.
Source to check: SEBI investor education material (investor.sebi.gov.in); NSE glossary (beta)
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.