Investors understand intuitively that some stocks are riskier than others. The capital asset pricing model attempts to quantify the common perception of risk using a term called beta. By understanding ...

Beta is a measurement of an asset’s risk compared to a benchmark, like the stock market. The market or benchmark used to calculate an asset’s beta always has a beta of 1. Stocks that have a return ...

Last week, we received some excellent feedback in response to Monday’s article on calculating a stock’s beta. So today, I’m going to take this little-known metric one step further by showing you how ...

Investors, whether beginner or seasoned professionals, all have a threshold for risk. Some prefer to play it safe and favor a low-risk investment plan while others are more advantageous with a “high ...

Every investor strives to balance two conflicting goals: Maximizing their investment returns and minimizing their risk. Beta offers a way to measure the amount of risk you’re taking on for a given ...

We often hear the word beta in the context of “beta test”. It’s a way of testing something (e.g. a software program) in a real-world situation to iron out any glitches before rolling it out to the ...

The most common metric used to quantify a stock’s market risk is Beta—a measure of a security’s volatility compared to the overall market (usually the S&P 500). However, the Beta you typically see ...

Companies and investors review the weighted average cost of capital (WACC) to evaluate the returns that a firm needs to realize to meet all of its capital obligations, including those of creditors and ...