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What is market risk (beta) in securities market?
What is the significance of beta in investment decision making?
Beta provides investors with insight into the risk of a security or portfolio. If an investor has a high-risk tolerance, they may choose to invest in securities with higher betas for a potentially higher return. Conversely, if an investor has a low-risk tolerance, they may choose to invest in securities with lower betas for a potentially lower return but less volatility. Overall, beta helps investors assess and manage their risk when making investment decisions.