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A financial measure of a fund's sensitivity to market movements which measures the relationship between a fund's excess return over Treasury Bills and the excess return of a benchmark index (which, by definition, has $\beta=1$). A fund with a beta of $\beta$ has performed $r=(\beta-1)\times 100\%$ better (or $\vert r\vert$ worse if $r<0$) than its benchmark index (after deducting the T-bill rate) in up markets and $\vert r\vert$ worse (or $\vert r\vert$ better if $r<0$) in down markets.

See also Alpha, Sharpe Ratio

© 1996-9 Eric W. Weisstein