If a stock has a beta measure of 0.75, discuss what this means (be specific).

Question

Question

Answer 1

Answer #1

Beta 0.75 times Price of stock changes 0.75 times of changes to market.

Beta measures Systematic Risk.

Beta 0.75 means marketis changed by 10%, stock will change by 7.5%

Answer 2

Similar Homework Help Questions

Stock R has a beta of 1.5,Stock S has a beta of 0.75, the expected rate...

Stock R has a beta of 1.5,Stock S has a beta of 0.75, the expected rate of return on an average stock is 13 percent, and the risk-free rate of return is 7 percent. By how much does the required return on the riskier stock exceed the required return on the less risky stock?
The term Beta refers to a measure of a stock’s price volatility relative to the stock...

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...
What does the beta of a stock measure?

What does the beta of a stock measure?

Stock A has an annual expected return of 8%, a beta of .9, and a firm-specific...

Stock A has an annual expected return of 8%, a beta of .9, and a firm-specific volatility of 50% Stock B has an annual expected return of 9%, a beta of 1.3, and a firm-specific volatility of 40% The market has a standard deviation of 20%, and the risk-free rate is is 2%. What is the volatility of stock A? (in %, round to 1 decimal place)
Stock A has an annual expected return of 8%, a beta of .9, and a firm-specific...

Stock A has an annual expected return of 8%, a beta of .9, and a firm-specific volatility of 50% Stock B has an annual expected return of 9%, a beta of 1.3, and a firm-specific volatility of 40% The market has a standard deviation of 20%, and the risk-free rate is is 2%. Suppose we construct a portfolio built out of 50% stock A, 30% stock B, and 20% government t-bills. What is the expected return of this portfolio? (in...
A stock has an expected return of 15 percent, its beta is 0.75, and the risk-free...

A stock has an expected return of 15 percent, its beta is 0.75, and the risk-free rate is 8.25 percent. What must the expected return on the market be? O 17.25% O 18.11% O 16.39% O 9.00% O 17.94%

A stock has a market-beta of 1.23. This means that The stock is a less risky...

A stock has a market-beta of 1.23. This means that The stock is a less risky investment than an investment in the overall stock market If the general stock market is up 1.23%, this stock will be down 1.23%. The stockʹs returns will vary much more than the returns of the overall stock market None of the choices
A stock with a beta of 0.6 just paid a dividend of $0.75 and is price...

A stock with a beta of 0.6 just paid a dividend of $0.75 and is price at $42. If the risk free rate is 3% and the market risk premium is 6%, what is the expected growth rate for the stock? A. 1.37% B.4.73% C.4.81% D. 1.55%
A stock with a beta of 1.3 just paid a dividend of $0.75 and is priced...

A stock with a beta of 1.3 just paid a dividend of $0.75 and is priced at $42. If the risk-free rate is 3% and the market risk premium is 6%, what is the expected growth rate for the stock? A. 5.02% B. 8.86% C. 12.68% D. 9.01%

A stock with a beta of 1.2 just paid a dividend of $0.75 that is expected...

A stock with a beta of 1.2 just paid a dividend of $0.75 that is expected to grow at 7%. If the risk-free rate is 3% and the market risk premium is 5.5%, what should be the price of the stock in five years? A. $28.85 B. $43.29 C. $30.87 D. $40.46