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Stocks - Negative Beta

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A stock had a 12 percent return last year, a year when the overall stock market declined.
Does this mean that the stock has a negative beta and thus very little risk if held in a portfolio? Explain.

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Solution Summary

The solution discusses whether the stock has a negative beta and the amount of risk if held in a portfolio.

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Yes. A negative beta means that the stock will move against the market; ie when the ...

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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