Can I read Risk and Return: Understanding Beta on EtoBox?
Risk and Return: Understanding Beta by Fatima Guevarra is a document available to read on EtoBox.
What is Risk and Return: Understanding Beta about?
1) The CAPM model relates the required return of stocks to their beta, or systematic risk. A higher beta stock will have a higher required return. 2) If the market risk premium increases, the required returns of all stocks will increase proportionally to their beta. For example, a stock with beta of 1.2 would see its required return increase more than a stock with beta of 0.5. 3) Adding more stocks to a portfolio reduces its company-specific or diversifiable risk, as measured by the standard deviation. How
- Author
- Fatima Guevarra
- Language
- EN