If the beta for stock a equals zero then
WebThe beta of a stock or fund is always compared to the market/benchmark. The beta of the market is equal to 1. If a stock is benchmarked against the market and has a beta value greater than 1 (for example, we consider it as 1.6), this indicates that the stock is 60 percent riskier than the market as the market beta is 1. WebDec 5, 2024 · If the Beta of an individual stock or portfolio equals 1, then the return of the asset equals the average market return. The Beta coefficient represents the slope of the …
If the beta for stock a equals zero then
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WebA Beta of 0 does not imply zero variance, securities still have idiosyncratic risk (i.e. a random component of return not explained by systematic exposure). A risk-free investment is still …
WebQuestion: If the Beta for stock A equals zero, then; O A stock A's required return is equal to the required return on the market portfolio. B. stock A's required return is equal to the risk-free rate of return. C. stock A has a guaranteed return. D. stock A's required return is greater than the required return on the market portfolio. WebJan 25, 2024 · The stock does not move as the market moves. β = 0 Stock is uncorrelated to the market. The stock doesn’t have any relationship with market movement or volatility. β < 0 Stock is negatively correlated to the market. The stock moves opposite the market.
WebMar 13, 2024 · The beta (denoted as “Ba” in the CAPM formula) is a measure of a stock’s risk (volatility of returns) reflected by measuring the fluctuation of its price changes relative to the overall market. In other words, it is the stock’s sensitivity to market risk. WebIf the Beta for stock A equals zero, then: A) stock A has a guaranteed return. B) stock A's required return is equal to the required return on the market portfolio. C) stock …
WebAug 27, 2024 · An alpha of less than 0 indicates that the investment returned less than the benchmark, adjusted for their respective volatility. R-squared R-squared (R 2) is a method an investor or analyst...
WebFeb 10, 2024 · A stock can even have a beta of zero. This suggests that it acts independently of the overall stock market. Advantages and Disadvantages of Beta. … liberty federal credit union washingtonWebIf the Beta for stock A equals zero, then: A) stock A has a guaranteed return. B) stock A's required return is equal to the required return on the market portfolio. C) stock A's required return is equal to the risk-free rate of return. D) stock A's required return is greater than the required return on the market portfolio. liberty federal ironton ohioWebIf an asset has a beta above (below) 1, it indicates that its return moves more (less) than 1-to-1 with the return of the market-portfolio, on average. In practice, few stocks have … liberty federal credit union washington inWebThe expected return on the stock equals 5 + 0.9(12.5 - 5) = 11.75% 9. If the analysts estimate that the return on the stock market is 2.5% higher than the ... The beta for stock i is defined as correlation(i,m)*σ (i)/ σ (m). Hence a stock with a higher correlation can still have a lower σ (i) leading to a lower beta. D. False. Since the ... liberty feed and seedWebThe beta of a stock or fund is always compared to the market/benchmark. The beta of the market is equal to 1. If a stock is benchmarked against the market and has a beta value … mcgrawhill nervous system quizWebBeta = 0: If the Beta is equal to zero, then this implies no relationship between the movement of the returns of the stock and the market or the benchmark. Hence, both are … mcgraw-hill my math volume 1WebJan 18, 2024 · A stock that swings more than the market over time has a beta greater than 1.0. If a stock moves less than the market, the stock's beta is less than 1.0. High-beta stocks... mcgraw hill network construction