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Simple scenario: Taking into account beta of index is set at 1.0;

Lets say market increases by 5%

Beta of 1.5 would indicate that the particular portfolio would increase by 7.5%

as for beta of -1.5, the portfolio would decrease by 7.5%

Beta is a measure of sensitivity of market base on the reference index. Negative beta would mean that the portfolio is inversely proportional to market performance.

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