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    Corporate Risk: How would you describe beta? When would you use beta?

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    How would you describe beta? How does beta assist in identifying the different levels of risk? When would you use beta?

    © BrainMass Inc. brainmass.com June 3, 2020, 10:26 pm ad1c9bdddf
    https://brainmass.com/business/beta-and-required-return-of-a-project/corporate-risk-description-of-beta-231439

    Solution Preview

    Beta is a measure of systematic risk and is measured using the covariance of a securities return with the market in relation to the variance in market returns. Beta measures the risk of a security which cannot be diversified away. A security with beta greater than 1 is more risky that the market and a security with beta less than 1 is less risky than the market.

    Beta helps in identifying different levels of risk ...

    Solution Summary

    This 331 word solution explains how beta is used in identifying the different levels of risk.

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