What does beta measure and how is it interpreted, Finance Basics

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







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
Related Questions
ROE - Return on Equity The average of the industry ROE was 21.38% for 2004, 24.99% for 2005, and 23.56% for 2006. The chart showed that after the acquisition of IBM PC di

Following the Initial Public Offering (IPO), the shares of Rosetta Stone, the language instruction company, jumped almost 44 percent from an initial price of $18 to $25.55 in late-

You are taking an investment in the common stock of Crisp's Cookware. The stock is expected to pay a dividend of $2.00 a share at the end of the year (D1=2.00). The stock has a bet

Bird-in-hand Theory Advanced via John Leitner in year 1962 and furthered with Myron Gordon in year 1963. Argues such shareholders are risk averse and prefer specific. Dividend

In the present case, we need to take a decision about implementing one of the available two options, based on various factors. The available two options are either to complete a se

the two problems below (P1 and P2). Five marks each. Part marks will be allocated, but if you have the incorrect answer then you cannot expect to get more than half marks. Project

Functions of Central Bank a) Ensure Economic stability b) Lender to the government c) Printing of currency notes d) Banker to the government e) Lender of last reso

BAC is considering an issue of preferred stock.  The dividends are 8.12% of the $25 par value. a.    If the present price is $26.25 per share, what is the return on the preferre

Goals of firm's Credit Standards The goal of the firm's credit policy is to maximize the value of such firm. To complete this goal, the evaluation of investment in receivables

on may 1, counts, inc has a balance of $1000 in office supplie. during may the company buys $500 more of the office supplies. on may 31 the company counts the supplies and finds 20