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Re: alpha/beta - (Posted by rph on March 01, 2001 at 14:25:12)

In Reply to: alpha/beta posted by Shannon on February 13, 2001 at 09:50:18

Alpha measures the amount of reward earned for the risk taken; beta shows the level of volatility of a portfolio's return relative to the market's return.

Alpha - a positive alpha shows the portfolio achieved higher returns for the risk level; a negative alpha means lower returns for additional risk.
Beta - a beta greater than 1.00 means the portfolio has a higher volatility reative to its corresponding index; a beta less than 1.00 means that the portfolio had less volatility than its corresponding index.

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