[Series 65] 44, Alpha Beta and Standard Deviation

[Series 65] 44, Alpha Beta and Standard Deviation

From Open Exam Prep by Ran Chen, EA, CFP®

May 7, 2026 · 4 min

About this episode

This episode discusses key investment metrics including standard deviation, beta, alpha, and R-squared, and their relevance to the Series 65 exam.

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…

People in this episode

Host: Ran Chen

Topics covered

  • investment risk
  • standard deviation
  • beta
  • alpha
  • R-squared
  • Series 65 exam

Keywords

  • investment risk
  • standard deviation
  • beta
  • alpha
  • R-squared
  • Series 65
  • exam preparation

Mentioned in this episode

Organizations: S&P 500, Open Exam Prep, YouTube Channel

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