Beta is a measure of the volatility of an investment. In other words, beta measures how an investment's value changes in response to market conditions. The beta for the stock market as a whole is 1.0. Investments with betas that are higher than 1.0 are more volatile, and those with lower betas are less volatile than the overall market. For example, a mutual fund with a beta of 0.75 is three-quarters as volatile as market indexes. A negative beta indicates a stock that moves in the opposite direction than the market as a whole.
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