What is Stock Beta and Describe a Stock with little risk and Stock with high risk? Define Beta and provide industries that fall into low risk and high risk categories.

Q: The wider the dispersion of returns on a stock, the:

A: Investors evaluate the portfolio or security on the basis of risk profile. The risk profile can be…

Q: What is Security selection:           A)   determining beta of securities.          B)   investing…

A: Security selection refers to choosing specific securities within each asset class.

Q: Discuss the main factors that influence the prices of securities on a stock exchane.

A: There are many factors that influence the prices of securities.

Q: Common stock has par value, and market value. Explain briefly these values. Which one is most…

A: Par value of common stock : Par value corresponds to the equity valuation specified in the corporate…

Q: Define the terms covariance and correlationcoefficient. How are they related to one another,and how…

A: Covariance refers to the situation which tells about the association between two variables how they…

Q: How to figure out price targets for stocks by charting

A: One of the most typical ways to create a target price is to first identify a technical chart…

Q: Describe in your own words the characteristics of growth and value stocks.  Which type of stock is…

A: Stocks, usually referred to as shares or equities, are certificates of ownership in publicly traded…

Q: How does higher expected growth affect a stock’s value?

A: Stock value is referred to as the shares of the corporation, which used to appear to trade at the…

Q: Define average stock’s beta

A: Beta tells about the change in stock’s return given to change in market risk.

Q: How do you calculate the Treynor ratio for the AMD stock?

A: Treynor ratio is referred to as the portfolio performance, which used to measure regarding the…

Q: What does the meaning of maximum and minimum price in the stock performance graph? how to know which…

A: Succinctly summarized, a stock chart is a graph that illustrates the price of a stock over a certain…

Q: Beta is measure of a stock's _____________________ risk. Select all that apply. A) systematic…

A: There are two types of risk are present: 1. Systematic risk 2. Unsystematic risk.

Q: discuss what is the stock price?

A: >Stocks, when referred to in relation with the paid in capital of a corporation, refers to the…

Q: wo potential explanations for the observed stock price reaction around equity  carveout…

A: Equity carve out is a type of business reorganization. In this type of business reorganization, a…

Q: Which of the following is TRUE?     You should choose a stock with the greater Jensen’s alpha…

A: Jenson's alpha, Treynor ratio, Sharpe ratio are the portfolio measurement ratios which measures the…

Q: Which of the following factors is most likely to affect the level of systematic risk in a portfolio?…

A: Systematic risk-It is a risk that is impossible to completely avoid as the risk is inherent to the…

Q: When comparing the stock market to the bond market, what are the risks and advantages of investing…

A: Introduction: Investing in the stock market is purchasing stock in a business and so gaining…

Q: Describe the capital asset pricing model and explain the role of beta as a risk measurement tool.

A: Answer

Q: How does a stock price play a role in ROA or ROE

A: Return on Equity (ROE) is the ratio which defines the company’s efficiency to utilize investors…

Q: Differentiate between the terms expected rate of return, required rate of return, and historical…

A: The expected rate of return is the normal rate of return that the speculation can anticipate. By and…

Q: Why are the returns of sustainable stocks and traditional stocks different?

A: Stock returns are the returns that are generated in the stock market for investing in a stock.

Q: How is risk defined and measured? How might the magnitude of the market risk premium impact…

A: In financial terms, the risk is referred to as the possibility that an outcome's actual gains will…

Q: What is a stock’s volatility?

A: Stock Volatility:   Volatility is defined as a statistical measure of the dispersion of the returns…

Q: Describe two conditions which will determine whether or not a stock is in equilibrium. Can either of…

A: Equilibrium refers to a state of rest or a situation where demand is equal to supply. At point of…

Q: If a stock has a higher volatility, would your broker would want to set the maintenance margin…

A: Maintenance margin is minimum margin amount that we need to maintain as an investor after the…

Q: Investors require a 10 percent per year return on the stock of the Rabiya’s Corporation, which…

A: The company is considering the operating activities for the purpose of earnings income. The income…

Q: Explain how to find the value of a nonconstant growth stock

A: Introduction: Non-constant models of growth presume that the valuation can fluctuate over time. This…

Q: What is relationship between the market risk of a stock and it's expected return?

A: Expected return is directly related to the market risk . Market risk is represented by beta. Higher…

Q: a) Discuss why international stock might have high volatility but low betas.

A: Beta is the sensitivity of the price of an asset to movements in the market as a whole and is a…

Q: Which of the following best describe a speculative stock? high risk, low volatility, start-ups high…

A: Speculative stocks are those where the price of stock changes too frequently and are quite volatile.

Q: How do you calculate the beta of stock?

A: Beta is the measure of stock's volatility to the overall market, and is calculated as-

Q: How will you know if you think a certain stock will be more or less volatile in terms of price…

A: Investors have different options to make investments, and the motive behind investments is to…

Q: Explain stock market index, provide example and what is the importance?

A: Stock market or share market is an aggregation of purchasers and sellers of stocks and helps…

Q: Critically compare the riskiness of bonds and stocks from the valuation model perspective

A: The main fundamental difference between shares and bonds as investment options is the risk involved…

Q: How GARCH (generalized ARCH model) model is applied to Stock Price Volatility?

A: GARCH model is one of the models that is usually used by the financial analysts. The financial…

Q: What role does sentiment play to explain stock price volatility? Explain

A: The role of emotion in determining the price of a company is one of the most significant aspects to…

Q: Summarize the major factors affecting stock price?

A: Answer: Investment in stock market is uncertain, because stocks respond to various internal and…

Q: cyclical

A: Cyclical stocks are stocks the prices of which would be effected by economic cycles like expansion,…

Q: What is the difference between stock price indexes that are simple averages of prices and those that…

A: A stock index, often known as a stock market index, is a financial index that monitors a stock…

Q: Which one is the least risky option? A. Bonds B. Shares C. Treasury Bills D. Trading

A: Trading involves the buying and selling of financial instruments, such as stocks, bonds, currencies,…

Q: What does it mean to say “stock prices are nonstationary”?

A: Stock prices will be discovered by continuous interaction of demand and supply. Stock prices are…

Q: To estimate the required rate of return on a stock we can use the Capital Asset Pricing Model (CAPM)…

A: The required rate of return on a stock can be defined as a rate of return which an investor would…

Classification Of Risk

Risk means when there could be a possibility that the returns expected from a particular project or investment may or may not match the investor's expectations. In other words, the uncertainty of an income arising from a source that would either be lower than expected or result in losses in risk exposure of the project. The higher the risk involved, the higher is the return expected by the investor as the investor is exposed to a high level of risk. There are various methods by which different types of risk can be assessed and avoided or mitigated.