Correct answer: (d) a numeric value that measures the fluctuations of a stock to changes in the overall stock market.
Explanation
- A
the process of simultaneous buying and selling of an asset from difference platforms.
Simultaneous buy and sell on different platforms. That is arbitrage.
- B
an investment strategy of a portfolio manager to balance risk versus reward.
Balancing risk and reward. That is portfolio management in general.
- C
a type of systemic risk that arises where perfect hedging is not possible.
Systemic risk when hedging is imperfect. That is basis / residual risk, not beta.
- D
a numeric value that measures the fluctuations of a stock to changes in the overall stock market.
A number that measures how much a stock moves with the market. Beta.
Summary. Official key is (d). Beta is the sensitivity of a security’s returns to market returns (CAPM). Arbitrage, a manager’s risk-reward style, and unhedgeable residual risk are other words.