Can Beta of a Stock be 0? And can Beta be Negative?


 
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Can Beta of a Stock be 0? And can Beta be Negative?
Melvin
Question on CAPM: I know that in the CAPM Model the Beta for a stock can be less than one. If the company has a Beta of 0.33, then it is supposed to be 3 times less risky than the overall market. But can Beta also be zero? And can it be negative?
 

 
Can Beta be zero ?
Pereira
Assuming a Beta=0 is the same as to say that the r=Rf. Then, the security under valuation has the same expected earnings as a risk free asset. Finally...Sign up
 

 
Stock Beta =<0
CSB Nair
The beta can well be 0 or negative if the expected earnngs are below the risk free rate....Sign up
 

 
Stocks with a negative
Thomas
A company with a of 1.000 has the same expected return rate as the risk free rate.
I therefore believe that CSB Nair is incorrect: if the expec...Sign up
 

 
Beta of a stock
Harold
A beta of one means the stock moves with the market: in other words when the market moves up 5% the stock moves up 5%.
A stock with a b...Sign up
 

 
Gold
Walter
Gold-related stocks are typically beta-negative....Sign up
 

 
What about cash??
Bikash
Assets with beta 0 are same as risk-free assets and have same expected return and not assets with beta 1 as Thomas believes. Can assets have negative...Sign up
 

 
CAPM
Liaqat Ali
It is the theory that relates the expected return with the risk, so when we say that the beta is zero then it means that the security is risk free and...Sign up
 

 
CAPM
Anna
Risk-free security does not necessarily mean zero return-the return will be equal to the interest rate-i.e. Government bonds with 5% return-they are c...Sign up
 

 
Gold Industry may have a Negative Beta
Ghanshyam, Manager, India, Member
If beta < 0 then the investment's returns will move, on average, in the opposite direction to the market's returns, to a lesser extent if beta > -1, t...Sign up
 

 
Inflation in CAPM
Mukela Namushi Mubano, Accountant, Zambia, Member
I totally agree with @Anna. Inflation effects seem to be ignored when we are dealing with risk-free securities. All s...Sign up
 

 
Beta Can Be Negative: Gun Companies
nitish dwivedi, Student (Other), Member
Friends, at the time of war when all companies profits are falling, gun companies actually are making more profits by selling more. And when the war i...Sign up
 

 
Beta Does Not Imply No Risk!
SCOTT DIAMOND, Manager, United States, Member
While I would agree that safe investments have a low beta, this does not mean that if the beta is low the investment is safe. I follow stock of startu...Sign up
 

 
 


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