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What Is a Good Beta for a Stock? There is no such thing as an empirically “good” or “bad” beta for a stock. The type of beta you want for your portfolio depends on the type of investor you ...
Beta allows for a good comparison between an individual stock and a market-tracking index fund, but it doesn’t offer a complete portrait of a stock’s risk. Instead, it’s a look at its level ...
Beta is the hedge ratio of an investment with respect to the stock market. For example, to hedge out the market-risk of a stock with a market beta of 2.0, an investor would short $2,000 in the stock market for every $1,000 invested in the stock. Thus insured, movements of the overall stock market no longer influence the combined position on ...
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The relationship between stock returns to profit to determine the extent of the response that occurs to as the Earnings Response Coefficient (ERC). Some studies reveal there are four factors that affect Earnings Response Coefficient (ERC), namely : beta, capital structure, persistence and growth. [citation needed]
This is an example of a stock market anomaly since it contradicts the central prediction of many financial theories that higher returns can only be achieved by taking more risk. The capital asset pricing model (CAPM) predicts a positive and linear relation between the systematic risk exposure of a security (its beta) and its expected future return.
West Texas Intermediate crude oil rose 3.95% to $80.56 a barrel. Brent crude , the international benchmark, edged up 0.59% to $82.51 a barrel. Gold increased 0.69% to $2,695 an ounce.
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