Beta

Question 1

What is raw beta?

Answer 1

Historical beta of company stock vs the market using regression on past return

slope of company vs. market returns

Question 2

What is adjusted beta

Answer 2

Beta tendiert nach 1 zu convergen

2/3 raw beta + 1/3 1

Question 3

Fama–French Model

Answer 3

SMB (Small Minus Big): Size premium (small-cap outperform large-cap).

HML (High Minus Low): Value premium (high book-to-market outperform low).

Later extensions (Carhart 4-factor, 5-factor) add momentum, profitability, investment factors.

Question 4

Minority Interests in Multiples

Answer 4

EBITDA and EBIT reflect 100% of subsidiary performance, EV must also represent 100% of capital structure (debt + equity + minority interest).

else you would undervalue the firm

Question 5

Can an asset have a negative beta?

Answer 5

Gold