What does the beta of a stock measure?
Answer: beta measures the amount of systematic risk in a stock.
If a stock has a beta measure of 0.75, discuss what this means (be specific).
The term Beta refers to a measure of a stock’s price volatility relative to the stock market as a whole. A beta of 1 means the stock’s price moves exactly with the market. A beta of 1.6 means the stock’s price would increase by 1.6% for an increase of 1% in the stock market. A larger beta means the stock price is more volatile. The betas for the stocks of the companies that make up the Dow Jones Industrial Average...
Question 12 What does the beta measure? systematic risk diversifiable risk. company-specific risk. unsystematic risk.
6. The CAPM model introduces the concept of Beta as a measure of riskiness. If the Beta for a firm 1.3, what does that tell us about the stock of that firm? 7. Some stock analysts and stock market analysts say that optimism is one of the most important factors for individual corporate stocks and for the stock market as a whole. What does this mean? Explain why you agree or disagree. 8. Explain briefly why volatility is considered a...
What does the actual return of a stock with a Beta 0.6 risk free rate of 4% and a market premium of 5%
QUESTION 23 What does beta measure? a. Unsystematic Risk. b. Systematic Risk. c. Equity Risk Premium. d. Total Risk. QUESTION 24 Which of the following is an advantage of an indexed equity mutual fund as compared to a managed equity fund? a. Indexed funds have lower operating costs because of less stock trading. b. Indexed funds generally have better portfolio managers. c. Indexed funds engage in more research than managed funds. d. Index funds generally have less systematic risk compared...
Which of the following statements about risk measures is correct? a. Beta is a measure of systematic risk, whereas standard deviation is the measure of total risk. b. Beta is a measure of total risk, whereas standard deviation is the measure of unsystematic risk. c. Beta is a measure of total risk, whereas standard deviation is the measure of systematic risk. d. Beta is a measure of total risk, whereas Standard deviation is the measure of systematic risk. e. Beta...
What is the stock's beta? Why does the stock pay a lower risk premium than the market? A stock costs $30. It rises to $40 with probability 0.62 and falls to $20 with probability 0.38. The risk free interest rate is 2%. The market risk premium is 8%.
Beta is a measure of systematic risk. It is a relative risk measure to show you how sensitive the stock price is related to market movement, i.e., the S&P 500 index. When calculating beta, you need to regress y (stock return) against x (S&P 500 index return) and the coefficient of the x is the beta, please refer to the excel posted on module 6. I would like you to comment on the betas of the following ETFs: UGAZ, TVIX...
What is the beta of a portfolio including 20% of stock A with a beta of 0.90, 35% of stock B with a beta of 1.05, 30% of stock C with a beta of 1.73, and 15% of cash?