In the context of finance, the term “beta” refers to

(a) the process of simultaneous buying and selling of an asset from different platforms
(b) an investment strategy of a portfolio manager to balance risk versus reward
(c) a type of systemic risk that arises where perfect hedging is not possible
(d) a numeric value that measures the fluctuations of a stock to changes in the overall stock market

Explanation:

  • In finance, the beta (β) of an investment security (i.e., a stock) is a measurement of its volatility of returns relative to the entire market.
  • It is used as a measure of risk and is an integral part of the Capital Asset Pricing Model (CAPM). 
  • A company with a higher beta has greater risk and also greater expected returns.
  • So, the correct answer would be (d) a numeric value that measures the fluctuations of a stock to changes in the overall stock market.

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