Episode
[Series 65] 44, Alpha Beta and Standard Deviation
- Podcast
- Open Exam Prep
- Published
- May 7, 2026
- Duration seconds
- 232
- Processing state
not_requested- Canonical source
- https://open-exam-prep.captivate.fm/episode/series-65-44-alpha-beta-and-standard-deviation
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Summary
This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - Standard deviation measures an investment's total risk, which is the combination of systematic and unsystematic risk. - Beta is a narrower metric that measures only the systematic, or market, risk of an investment relative to a benchmark like the S&P 500. - Alpha represents the excess return an investment earns above its expected return, given its beta, serving as a measure of manager performance. - R-squared indicates how much of a portfolio's movement is explained by its benchmark, and a high R-squared is necessary for alpha and beta to be considered reliable statistics. - A common Series 65 exam trap involves a security with a high alpha but a low R-squared, which implies the alpha is not a meaningful indicator of performance. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep