Beta - Revision history

Dirkjan at 19:23, 27 August 2020

2020-08-27T19:23:29Z

Dirkjan at 18:38, 27 August 2020

2020-08-27T18:38:33Z

Dirkjan: Created page with "The '''''Beta''''' measures the amount that investors expect the stock price to change for each additional 1% change in the market. The average beta of all stocks is 1.0. A st..."

2020-08-25T07:39:13Z

Created page with "The '''''Beta''''' measures the amount that investors expect the stock price to change for each additional 1% change in the market. The average beta of all stocks is 1.0. A st..."

New page

The '''''Beta''''' measures the amount that investors expect the stock price to change for each additional 1% change in the market. The average beta of all stocks is 1.0. A stock with a beta lower than 1.0 is unusually insensitive to market movements. A stock with a beta > 1.0 is above average sensitive to market movements.

The formula for beta is:

<math>\beta_i</math> = <math>\frac{\sigma_{im}}{\sigma^2_i}</math>

Where <math>\sigma_{im}</math> is the [[Covariance|Covariance]]@math between the stocks returns and the market returns and <math>{\sigma^2_i}</math> is the variance of returns in the market.
[[Category:finance]]

[[Category:M12]]

[[Category:Principles of Corporate Finance]]

[[Category:Term]]

← Older revision		Revision as of 18:38, 27 August 2020
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−	~~The '''''~~Beta''''' measures the amount that investors expect the stock price to change for each additional 1% change in the market. The average beta of all stocks is 1.0. A stock with a beta lower than 1.0 is unusually insensitive to market movements. A stock with a beta > 1.0 is above average sensitive to market movements.	+	Beta
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−	~~The formula for beta is:~~
−
−	~~<math>\beta_i</math> = <math>\frac{\sigma_{im}}{\sigma^2_i}</math>~~
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−	~~Where <math>\sigma_{im}</math> is the [[Covariance\|Covariance]]@math between the stocks returns and the market returns and <math>{\sigma^2_i}</math> is the variance of returns in the market.~~
	[[Category:finance]]		[[Category:finance]]

← Older revision		Revision as of 19:23, 27 August 2020
Line 1:		Line 1:
−	Beta	+	The '''''Beta''''' measures the amount that investors expect the stock price to change for each additional 1% change in the market. The average beta of all stocks is 1.0. A stock with a beta lower than 1.0 is unusually insensitive to market movements. A stock with a beta > 1.0 is above average sensitive to market movements.
		+
		+	The formula for beta is:
		+
		+	<math>\beta_i</math> = <math>\frac{\sigma_{im}}{\sigma^2_i}</math>
		+
		+	Where <math>\sigma_{im}</math> is the [[Covariance\|Covariance]]@math between the stocks returns and the market returns and <math>{\sigma^2_i}</math> is the variance of returns in the market.
	[[Category:finance]]		[[Category:finance]]