Conceptual Comment

What does 'beta' means in Finance?

A measure of volatility of a stock, or any other financial security, based on the magnitude of change in its price compared to the market as a whole. In mainstream finance, stocks with high beta are generally considered to be riskier than stocks with low beta. Stocks with high beta, since they are riskier, are also considered to be better investments for investors seeking higher returns. Others, primarily value investors, have disputed this claim saying that risk has nothing to do with the degree of volatility in the price of a stock, but instead linked to the fundamental strength of the underlying business.

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Printable version | Feb 27, 2020 11:25:57 AM |

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