Is the beta of a stock static or dynamic? What could affect the beta of a stock?© BrainMass Inc. brainmass.com March 4, 2021, 9:10 pm ad1c9bdddf
As you will likely recall, the beta of a stock is the measure of the stock's volatility against the market as a whole. The overall market is said to have a beta of 1.0. So, if a stock's share price swings more wildly (up, down, or both) than the overall market, the stock's beta will be greater than 1.0 indicative of a relatively higher-risk investment opportunity.
Conversely, if a stock's share ...
The solution explains whether a stock's beta is static or dynamic and what factors can affect it.