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Options
- A
Tracking error
-
Beta coefficient
Correct answer
- C
Treynor ratio
- D
Sharpe ratio
Why this is the answer
Beta measures a mutual fund's relative volatility compared to the market index. A beta of 1 indicates the fund moves in line with the market, while a beta greater than 1 means the fund is more volatile. For example, a beta of 1.5 means that for every 1% change in the market, the fund is expected to change by 1.5%.
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