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Variance measures the fluctuation in periodic returns of a scheme, as compared to its own average
return.
A high standard deviation indicates greater volatility in the returns and greater risk.
Beta
risks arising
out of inflation, interest rates, political risks etc.
Non-systematic risk
risk arising out of change in
management, product obsolescence etc.
Beta measures the fluctuation in periodic returns in a scheme, as compared to fluctuation in periodic
returns of a diversified stock index (representing the market) over the same period.
Credit Rating
credit or default risk in a scheme.
Government securities do
not have a credit risk. Similarly, cash and cash equivalents do not have a credit risk. Investments in
corporate issuances carry credit risk. Higher the credit rating, lower is the default risk
2. Midcap stocks
mid cap indices such as Nifty Midcap 50 or S&P
BSE Midcap are considered as better benchmarks.
NSE’s MIBOR (Mumbai Inter-Bank Offered Rate) is based on short term money market
NSE similarly has indices for the Government Se
ICICI Securities’ Sovereign Bond Index (I-Bex) is again calculated based on government securities.curities
Market.
o Si-Bex (1 to 3 years),
o Mi-Bex (3 to 7 years) and
o Li-Bex (more than 7 years