Beta, CPM and Arbitrage Flashcards
1
Q
Stocks Beta coefficient
A
A stock’s beta coefficient is a measure of its volatility over time compared to a market benchmark. A beta of 1 means that a stock’s volatility matches up exactly with the markets. A higher beta indicates great volatility, and a lower beta indicates less volatility.
2
Q
In finance, the beta is a measure of
A
how an individual asset moves when the overall stock market increases or decreases.
3
Q
Beta Formula
A
Cov(rs,rm) / V(rm)
