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.
Same topic · past papers
UPSC has asked this before
These previous-year questions sit on the same topic. Open one to practise the earlier ask.
-
2026 · Q25 · General Studies · 2 marks
Identify the river of the Indian sub-continent on the basis of the following information: 1. It has an antecedent drainage system. 2. It flows through three countries. 3. It originates in the Tibetan Plateau and is an important river for irrigation. 4. It does not form distributaries. Select the answer from the following: