The Beta of several industry sectors is shown below.

Industry                                                                                            Beta (β)

Banks                                                                                                   0.78      

Food and staples retailing                                                                       0.65

Materials                                                                                               1.11

Utilities                                                                                                 0.79

Food and Beverage and Tobacco production                                            0.57

Retailing (Discretionaries)                                                                     1.28

elecommunication Services                                                                   0.38

 Part A

What does Beta measure and how is it interpreted? In your answer you should refer to some of the industry measures above.

Part B

How does Beta differ from standard deviation? Explain why companies with a high standard eviation will not necessarily have a high beta.

Posted Date: 3/2/2013 3:04:44 AM | Location : United States

Ask an Expert

Related Discussions:- What does beta measure and how is it interpreted, Assignment Help, Ask Question on What does beta measure and how is it interpreted, Get Answer, Expert's Help, What does beta measure and how is it interpreted Discussions

Write discussion on What does beta measure and how is it interpreted
Your posts are moderated

Write your message here..

Related Questions

Horizontal financial analysis, For this assignment you are acting as a fina... For this assignment you are acting as a financial analyst for Apple Inc. Apple Inc. Is one of the most innovative companies worldwide. For example, in November 2012 Apple sold 3 mi

Finance final, • Company X has $100,000 face value of outstanding bonds con... • Company X has $100,000 face value of outstanding bonds consisting of 100 $1,000 face value bonds with a 4% annual coupon and 20 years remaining until maturity. The bonds are cur

Risk premium of a stock, (a) RBC has 100 loans outstanding, each for $1 mil... (a) RBC has 100 loans outstanding, each for $1 million, which it expects to be repaid today.  Each loan has a 5% probability of default, in which case the bank is not repaid anythi

Capital Allocation, Consider the following capital market yielding 1% per y... Consider the following capital market yielding 1% per year and a mutual fund consisting of 60% stocks and 40% bonds. expected return of stocks 9.75% per year and expected return on

Finance applicatios and theory, Zoeckler Mowing & Landscaping''s year-end 2... Zoeckler Mowing & Landscaping''s year-end 2012 balance sheet lists current assets of $436,500, fixed assets of $551,500, current liabilities of $417,900, and long-term debt of $317

Basic Business Math, A new pet shop wants to apportion their investment mon... A new pet shop wants to apportion their investment money $132,000 for advertising, building upgrades, and education in the ratio of 5:4:3. How much money does each category get app

Describe the duties of the financial manager, Describe the duties of the fi... Describe the duties of the financial manager in a business firm? Financial managers calculate the firm's performance, define what the financial consequences will be if the firm

Net cash flow, Assignment: Mr. Ali wants to start “Rent-A-Car” business. He... Assignment: Mr. Ali wants to start “Rent-A-Car” business. He wants to start this business with at least 20 cars. He estimates that the required investment for the business is Rs.

Turnover ratios, Turnover Ratios Turnover Ratios/efficiency/asset mana... Turnover Ratios Turnover Ratios/efficiency/asset management ratio Turnover ratio shows the efficiency along with that the firm utilized the asset or resources at its dispos

Find the required return, Marbela Corporation's stock had a required return... Marbela Corporation's stock had a required return of 12.75% last year, when the risk-free rate was 6.4% and the market risk premium was 5.5%.  Now suppose the market risk premium d