Mutual Funds

Beta

Beta is a fundamental concept in finance that allows us to assess the risk associated with a particular mutual fund. It is derived by dividing the covariance of the fund by its variance. A Beta ratio of 0.4 or 40% indicates that the fund is 0.6 or 60% less volatile than the overall market. This helps investors understand the potential risks and returns associated with their investment choices.

Related terms

Tracking Error

Understand the meaning and definition of Tracking Error in the context of stock market, trading, and investments.

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Sharpe Ratio

Understand the meaning and definition of Sharpe Ratio in the context of stock market, trading, and investments.

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Default Risk

Understand the meaning and definition of Default Risk in the context of stock market, trading, and investments.

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Coupon Payments

Understand the meaning and definition of Coupon Payments in the context of stock market, trading, and investments.

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Unit Trust

Understand the meaning and definition of Unit Trust in the context of stock market, trading, and investments.

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Expense Ratio

Understand the meaning and definition of Expense Ratio in the context of stock market, trading, and investments.

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