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Why does a high beta stock or portfolios do not produce higher return?
Wiki User
∙ 13y ago
There are many other factors involved in achieving high returns other than Beta. These include
- Technical Analysis
- Other fundamental analysis variables
- The condition of the broad market (indices, individual blue chip or market moving stocks)
To go a step further, if you consider the nature of markets it would be clear that there isn't any one, simple thing that determines if you will earn high returns in any financial instrument. This is because as soon as it is known that any given variable could mean the stock price will move up what you see is the market almost immediately pricing this variable into the stock price. There is a huge argument over what is called the efficient market hypothesis and what economists like Schiller refer to as irrational market behavior.
Wiki User
∙ 13y ago
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What are method use in Stock Exchange for calculation Index?
The stock exchange index is a relative measure of the performance of all or a number of stocks that are traded on a stock exchange. it incorporates the return on stocks, their volumes traded and the shares outstanding. there can be a number of indices relating to a single stock exchange that incorporates the returns on a number of companies. they can also be differentiated on the basis of the return on different industries.
How are variance and standard deviation used as measures of risk for both a security and a portfolio?
Risk reflects the chance that the actual return on an investment may be very different than the expected return. One way to measure risk is to calculate the variance and standard deviation of the distribution of returns.Consider the probability distribution for the returns on stocks A and B provided below.StateProbabilityReturn onStock AReturn onStock B120%5%50%230%10%30%330%15%10%320%20%-10%The expected returns on stocks A and B were calculated on the Expected Return page. The expected return on Stock A was found to be 12.5% and the expected return on Stock B was found to be 20%.Given an asset's expected return, its variance can be calculated using the following equation:whereN = the number of states,pi = the probability of state i,Ri = the return on the stock in state i, andE[R] = the expected return on the stock.The standard deviation is calculated as the positive square root of the variance.Note: E[RA] = 12.5% and E[RB] = 20%Stock AStock B
An issue of common stock has just paid a dividend of 3.75 its growth rate is 8 percent what is its price if the market return is 16 percent?
$50.63
What are the examples of the quantitative analysis process?
Working with POM QM and trying to determine the correct input data for a question. It goes something like this... $50K to spend Stock #1 = 12% return with a risk factor of 9 (1-10, 10 = highest) Stock #2 = 6% return with a risk factor of 4. Risk factor of the invest can not be more than 6. Trying to determine how data should be input to POM QM Thanks!
What are the advantages and disadvantages of capital asset pricing model?
It considers only systematic risk, reflecting a reality in which most investors have diversified portfolios from which unsystematic risk has been essentially eliminated. It generates a theoretically-derived relationship between required return and systematic risk which has been subject to frequent empirical research and testing. It is generally seen as a much better method of calculating the cost of equity than the dividend growth model (DGM) in that it explicitly takes into account a company’s level of systematic risk relative to the stock market as a whole. It is clearly superior to the WACC in providing discount rates for use in investment appraisal.
Can stock market game portfolios earn divdends?
no
What has the higher return preferred stock or common stock?
Dividend on common stock has to be more than dividend on preferred stock because of higher risk involved in equity investments.
What are some features to the vanguard total stock market?
Vanguard total stock marketoffers a wide range of stock options, like mutual funds, retirement funds, EFTs, annuity portfolios, IRAs, college funds 529 portfolios and stock, bonds & CDs as well as financial advice.
Purpose of portfolio?
There are many different types of portfolios. A stock portfolio, for instance, puts all of your stock information in one place.
Why do investment bankers buy the stocks?
to sell at a higher profit to their clients....? They can be buying to collect on dividends, lower cost basis of stock they already own, diversify their portfolios, speculation and of coarse profit in the resale.
What is professionally managed portfolios made up of stock's bonds and other investments?
Mutual Funds
What is the definition of "stock options analysis"?
An analysis of your portfolio to see how well your investments currently are. A lot of stock brokers hire someone to manage their personal portfolios.
Does adding stocks decrease a portfolios standard deviation and risk?
It depends on the standard deviation and risk of the new stock.
How can I learn more about stock options?
Read the stock reports and find out which options have a higher return on there caps. Watch and study the stocks for a while then invest in them or talk to a finacial advisor.
If CAPM is valid then a stock having more volatile returns must have larger expected return than a stock with less volatile returns to compensate for higher risk borne?
no
Where can a person find stock ballet pictures?
One can find stock ballet pictures on the website Shutterstock. They specialize in selling stock pictures for portfolios at a competitive price. They have a wide variety of pictures to choose from.
10000 to invest in a stock portfolio. stock A expected return 18 and stock B expected return 11. create a portfolio with expected return of 16.25. how much to invest in stock A and stock B?
6000.00
