A measure of the market/non-diversifiable risk associated with any given security in the market. The higher the beta the greater the expected volatility of a given stock relative to a specific movement in the market, and vice versa. If a stock increased in value by 12% while the market increased by 10%, the stock’s beta would be 1.2. Other things being equal a portfolio with a high beta would be expected to outperform the market on the upside and under perform on the downside.

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