Beta (finance)/Definition

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< Beta (finance)
Revision as of 07:05, 1 March 2008 by imported>Nick Gardner
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A measure of the degree to which the price of a share tracks the market average (defined as the covariance (qv) between the price of the share and the average market price, divided by the variance (qv) of the market price). If beta = 1 the share price moves in line with the market price; if it is negative, it falls when the market price rises. (Also applied to rates of return).