How would you describe beta? How does beta assist in identifying the different levels of risk?© BrainMass Inc. brainmass.com June 3, 2020, 9:57 pm ad1c9bdddf
How would you describe beta? How does beta assist in identifying the different levels of risk?
Before we discuss beta, let us discuss risk and return.
Risk is the degree of uncertainty about your expected return from an investment, including the possibility that some or all of your investment may be lost. Risk is the possibility that an investment may go down in value or not perform as well as expected.
No investment, whether domestic or international, is risk free. Even money lying securely in a savings account is at risk from inflation. One fundamental rule applies to all investments. The smaller the risk, the smaller your potential return. The higher the risk, the higher is the potential reward. All investors would like the ...
Describes beta and how it assists in identifying risk.