Investors understand intuitively that some stocks are riskier than others. The capital asset pricing model attempts to quantify the common perception of risk using a term called beta. By understanding ...
Beta is the 2nd letter in the Greek alphabet, and the financial world uses it to refer to the sensitivity of an asset’s price compared to a specific index or benchmark. Beta is also used as a measure ...
Beta is a statistical measure used by stock analysts to factor the risk of a certain stock in terms of valuation. It determines the volatility of a stock within the market at the current point in time ...
Daniel Jassy, CFA, is an Investopedia Academy instructor and the founder of SPYderCRusher Research. He contributes to Excel and Algorithmic Trading. Dr. JeFreda R. Brown is a financial consultant, ...
Daniel McNulty began writing for Investopedia in 2012. His work includes articles on financial analysis, asset allocation, and trading strategies. Andy Smith is a Certified Financial Planner (CFP®), ...
Beta is a measurement of an asset’s risk compared to a benchmark, like the stock market. The market or benchmark used to calculate an asset’s beta always has a beta of 1. Stocks that have a return ...
Investors, whether beginner or seasoned professionals, all have a threshold for risk. Some prefer to play it safe and favor a low-risk investment plan while others are more advantageous with a “high ...
Investors understand intuitively that some stocks are riskier than others. The capital asset pricing model attempts to quantify the common perception of risk using a term called beta. By understanding ...
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