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Author Question: Which of the following statements regarding beta coefficient is correct? (Read 43 times)

mccallkeeler

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on: Aug 7, 2023
Which of the following statements regarding beta coefficient is correct?

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According to the definition of beta coefficient,a stock with a high standard deviation will tend to have a high beta, which means that it contributes a relatively large amount of risk to a well-diversified portfolio.


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The stand-alone risk of an individual stock, which is called its beta coefficient, b, is defined under the CAPM as the amount of risk that the stock contributes to the market portfolio.


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According to the definition of beta coefficient, a stock with a high correlation with the market will also have a small beta, and hence be less risky.


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We cannot obtain the beta coefficient based on the covariance between a stock and the market and the standard deviation of the market’s return.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by mccallkeeler on Aug 7, 2023

koung719

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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mccallkeeler

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Reply 2 on: Aug 7, 2023
Thanks for the timely response, appreciate it

Missbam101

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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