n NISM Certifications
XXI NISM Series XXI-A
Medium

Which of the following best describes 'Beta' in the context of portfolio risk?

Practice question from NISM XXI A for PMS - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Measure of total risk of a security

  2. Measure of systematic risk relative to the market

    Correct answer

  3. C

    Measure of unsystematic risk specific to a security

  4. D

    Measure of the risk-free rate of return

Why this is the answer

Beta quantifies how much a security's returns move in relation to the market; it measures systematic risk.

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