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Trading Terms

Beta (Coefficient)

Beta is a crucial metric in finance that measures the level of risk associated with a security in the market. It is essentially a comparison of an individual stock's historical returns to the returns of the overall stock market. For instance, if a stock's value increased by 12% while the market grew by 10%, its beta would be 1.2. This helps investors assess the potential level of volatility and make informed decisions.

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