Ch.10 · Risk Measures and Ratios · medium
A mutual fund has a beta of 0.8. What does this mean?
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EXPLANATION
A beta of 0.8 means the fund is 20% less volatile than its benchmark. When the market rises 10%, the fund typically rises about 8%; when the market falls 10%, the fund typically falls about 8%. Lower beta funds are less sensitive to market swings, making them suitable for conservative equity investors.
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