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The volatility of a stock is often measured by its beta value. More information about beta values is provided below. The table below gives beta values for five stocks. Complete (a) and (b). Company Beta A 0.38 0.72 1.33 2.73 5.16 Click the icon to view information about the beta value of a stock. a. For each of the five companies, interpret the beta value. Choose the correct answer below. O A. The stocks of companies A and B move about 62% and 28% as much as the overall market, respectively. The stocks of companies C, D, and E move about 133%, 273%, and 516% as much as the overall market, respectively. O B. The stocks of companies A and B move about 38% and 72% as much as the overall market, respectively. The stocks of companies C, D, and E move about 33%, 173%, and 416% more than the overall market, respectively. O C. The stocks of companies A and B move about 38% and 72% less than the overall market, respectively. The stocks of companies C, D, and E move about 33%, 173%, and 416% more than the overall market, respectively. O D. The stocks of companies A and B move about 38% and 72% more than the overall market, respectively. The stocks of companies C, D, and E move about 33%, 173%, and 416% more than the overall market, respectively.

The volatility of a stock is often measured by its beta value. More information about beta values is provided below. The table below gives beta values for five stocks. Complete (a) and (b). Company Beta A 0.38 0.72 1.33 2.73 5.16 Click the icon to view information about the beta value of a stock. a. For each of the five companies, interpret the beta value. Choose the correct answer below. O A. The stocks of companies A and B move about 62% and 28% as much as the overall market, respectively. The stocks of companies C, D, and E move about 133%, 273%, and 516% as much as the overall market, respectively. O B. The stocks of companies A and B move about 38% and 72% as much as the overall market, respectively. The stocks of companies C, D, and E move about 33%, 173%, and 416% more than the overall market, respectively. O C. The stocks of companies A and B move about 38% and 72% less than the overall market, respectively. The stocks of companies C, D, and E move about 33%, 173%, and 416% more than the overall market, respectively. O D. The stocks of companies A and B move about 38% and 72% more than the overall market, respectively. The stocks of companies C, D, and E move about 33%, 173%, and 416% more than the overall market, respectively.

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
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**Title: Understanding Beta Values in Stock Volatility** **Volatility and Beta Values** The volatility of a stock is often measured by its beta value. A beta value indicates how much a stock's price movement correlates with the overall market movement. **Beta Values Table for Five Companies** The table below gives beta values for five stocks, labeled A through E: | Company | A | B | C | D | E | |---------|-----|-----|-----|-----|-----| | Beta | 0.38| 0.72| 1.33| 2.73| 5.16| **Interpreting Beta Values** - **Beta < 1**: The stock is less volatile than the overall market. - **Beta = 1**: The stock's volatility matches the overall market. - **Beta > 1**: The stock is more volatile than the overall market. **Interpretation Question** For each of the five companies, interpret the beta value. Choose the correct answer from the options below: - **A.** The stocks of companies A and B move about 62% and 28% as much as the overall market, respectively. The stocks of companies C, D, and E move about 133%, 273%, and 516% as much as the overall market, respectively. - **B.** The stocks of companies A and B move about 38% and 72% as much as the overall market, respectively. The stocks of companies C, D, and E move about 33%, 173%, and 416% more than the overall market, respectively. - **C.** The stocks of companies A and B move about 38% and 72% less than the overall market, respectively. The stocks of companies C, D, and E move about 33%, 173%, and 416% more than the overall market, respectively. - **D.** The stocks of companies A and B move about 38% and 72% more than the overall market, respectively. The stocks of companies C, D, and E move about 33%, 173%, and 416% more than the overall market, respectively. **Note** Understanding beta values helps investors assess risk. A stock with a high beta is more volatile and potentially offers higher returns, but also more risk. A low beta suggests stability and possibly lower returns.
Transcribed Image Text:**Title: Understanding Beta Values in Stock Volatility** **Volatility and Beta Values** The volatility of a stock is often measured by its beta value. A beta value indicates how much a stock's price movement correlates with the overall market movement. **Beta Values Table for Five Companies** The table below gives beta values for five stocks, labeled A through E: | Company | A | B | C | D | E | |---------|-----|-----|-----|-----|-----| | Beta | 0.38| 0.72| 1.33| 2.73| 5.16| **Interpreting Beta Values** - **Beta < 1**: The stock is less volatile than the overall market. - **Beta = 1**: The stock's volatility matches the overall market. - **Beta > 1**: The stock is more volatile than the overall market. **Interpretation Question** For each of the five companies, interpret the beta value. Choose the correct answer from the options below: - **A.** The stocks of companies A and B move about 62% and 28% as much as the overall market, respectively. The stocks of companies C, D, and E move about 133%, 273%, and 516% as much as the overall market, respectively. - **B.** The stocks of companies A and B move about 38% and 72% as much as the overall market, respectively. The stocks of companies C, D, and E move about 33%, 173%, and 416% more than the overall market, respectively. - **C.** The stocks of companies A and B move about 38% and 72% less than the overall market, respectively. The stocks of companies C, D, and E move about 33%, 173%, and 416% more than the overall market, respectively. - **D.** The stocks of companies A and B move about 38% and 72% more than the overall market, respectively. The stocks of companies C, D, and E move about 33%, 173%, and 416% more than the overall market, respectively. **Note** Understanding beta values helps investors assess risk. A stock with a high beta is more volatile and potentially offers higher returns, but also more risk. A low beta suggests stability and possibly lower returns.
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