14 - Is the expected return on a stock with a beta=2.0...

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Is the expected return on a stock with a beta=2.0 twice the expected return on a stock with a beta=1.0? Perhaps the single most important measure of stock risk or volatility is a stock's beta . It's one of those at-a-glance measures that can provide serious stock analysts with insights into the movements of a particular stock relative to market movements. The concept of beta is fairly simple: it's a measure of individual stock risk relative to the overall risk of the stock market. It's sometimes referred to as financial elasticity. The measure is just one of several values that stock analysts use to get a better feel for a stock's risk profile. Beta values are fairly easy to interpret. If the stock's price experiences movements that are greater - more volatile - than the stock market, then the beta value will be greater than 1. If a stock's price movements, or swings, are less than those of the market, then the beta value will be less than 1. The beta coefficient is a key parameter in the capital asset pricing model (CAPM). CAPM is
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14 - Is the expected return on a stock with a beta=2.0...

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