Discuss Apple's (AAPL) beta and relate to the volatility of the stock and its returns over...

Discuss Apple's (AAPL) beta and relate to the volatility of the stock and its returns over a six month period.

Solutions

Expert Solution

Beta of a stock is reflecting the sensitiveness of the stock in respect to the market and it is a reflection of volatility of the stock so sometimes, it is also used to reflect the systematic risk associated with the movement of the stock in Capital Asset pricing model.

Beta of Apple company is 1.31 if we are considering the past five years of monthly beta which has been adjusted to risk and beta of Apple is representing that it is a highly sensitive company in respect to the market rate of volatility so it is more volatile than the market and it is reflecting a higher volatility so it is more sensitive stock and it is having a higher systematic risk in respect to the market.

Market rate of return of Apple in past six months had been closed to 80% which is a representation of outperformance of the Apple in respect to the market indices and this company has provided with a phenomenal rate of return as its volatility and higher risk & it is moving with a higher pace than the market and it is also representing that it is having a higher risk so it can be correlated with a higher rate of return so it can be overall summarised that the beta of Apple is relatively higher than the index and it is also having a higher rate of return than the index.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Discuss Apple's (AAPL) and Microsoft (MSFT) beta and relate to the volatility of the stock and...

Discuss Apple's (AAPL) and Microsoft (MSFT) beta and relate to the volatility of the stock and its returns over a six month period.

CEO Name Stock Ticker (Example Apple's ticker on the NASDAQ is AAPL) Current stock price. 52...

CEO Name Stock Ticker (Example Apple's ticker on the NASDAQ is AAPL) Current stock price. 52 week range Number of shares outstanding Market Capitalization Tell me why you are interested in this company and if you had an opportunity, would you buy their stock? Why or Why not? Upload text responses. Make sure you copy the questions as well so I know what you are responding to.

Betas: Stock Volatility Conceptual Overview: Explore how stock volatility relates to the beta coefficient b risk...

Betas: Stock Volatility Conceptual Overview: Explore how stock volatility relates to the beta coefficient b risk measure. The tendency of a stock to move with the market is measured by its beta coefficient, b. When first loaded, the graph shows the line for an average stock, which necessarily matches the market return. In a year when the market returns 10%, the average stock returns 10%. And in a year when the market goes down -10%, the average stock goes down...

1. Beta is a measure of volatility. Discuss how beta is utilized by the individual investor...

1. Beta is a measure of volatility. Discuss how beta is utilized by the individual investor for decision making regarding one particular stock. Also, discuss how to utilize beta when examining one particular stock to fit within a portfolio of stocks. Apply your discussion to a company of your choosing. 2. Regarding the company you researched for the Beta discussion, what is the stock’s standard deviation and expected value? Explain what they are and how they apply to risk management...

You consider investing in an emerging market. Its stock market volatility (standard deviation of returns measured...

You consider investing in an emerging market. Its stock market volatility (standard deviation of returns measured in U.S. dollars) is 25%. The volatility of the World index of developed markets is 15%. The correlation between the emerging market and the World index is 0.2. a. What would be the volatility of a portfolio invested 95% in the World index and 5% in this emerging market? b. Compare the result found in the previous question with the volatility of the World...

Suppose you estimate that Costco’s stock has a volatility of 15% and a beta of 0.15....

Suppose you estimate that Costco’s stock has a volatility of 15% and a beta of 0.15. A similar analysis for Target yields a volatility of 12% and a beta of 0.4. Moreover, suppose the risk-free interest rate is 3% and you estimate the market’s expected return to be 9%, and volatility to be 12%. (YOU MUST SHOW YOUR WORK TO RECEIVE FULL CREDIT) (a) Which stock carries more total risk? (b) Which stock has more systematic risk? (c) Which stock...

Use monthly data to compute the volatility and correlation between the NASDAQ and S&P returns over...

Use monthly data to compute the volatility and correlation between the NASDAQ and S&P returns over the last 1 year, over the last 2 years, and over the last 5 years. Show your results on a graph.

Using a regression to estimate beta, we run a regression with returns on the stock in...

Using a regression to estimate beta, we run a regression with returns on the stock in question plotted on the Y axis and returns on the market portfolio plotted on the X axis. The intercept of the regression line, which measures relative volatility, is defined as the stock’s beta coefficient, or b. True. FALSE A 10-year corporate bond has an annual coupon payment of 2.8%. The bond is currently selling at par ($1,000). Which of the following statement is NOT...

Using a regression to estimate beta, we run a regression with returns on the stock in...

Homework 7 VOLATILITY 1. Find the mean and standard deviation of returns for stock ABC. Year...

Homework 7 VOLATILITY 1. Find the mean and standard deviation of returns for stock ABC. Year % Return (using logs) 2003 3.45 2004 7.81 2005 8.34 2006 6.21 2007 -8.81 2008 -5.30 2009 2.01 2. Find the expected return and standard deviation of a portfolio which holds $300 in asset A and $700 in asset B. There is a correlation of -0.6 between asset A and B. Asset Expected Return Expected Standard Deviation A 8.3% 12.1% B 4.6% 7.3% 3....

Subjects