AT&T’s reported Beta is .44 while Verizon’s Beta is .57. This means: AT&T is more volatile...

AT&T’s reported Beta is .44 while Verizon’s Beta is .57. This means:

		AT&T is more volatile than Verizon
		AT&T and Verizon are less volatile than the market overall.
		Verizon may be slightly more volatile than the overall market
		None of these

If I bought 100 shares of Apple at $250 per share and sold them one year later at $310 per share, what is my total capital gain?

		$6,000
		25%
		$60
		None of these

note:if you are not 100% sure please don't give answers.

Expert Solution

AT&T’s reported Beta is .44 while Verizon’s Beta is .57. This means:

AT&T and Verizon are less volatile than the market overall.

Option B is correct

The beta of market is 1. Both AT&T and Verizon have a beta of less than 1, which implies that their volatility is less than the volatility of the market.

Option A is incorrect because Verizon is more volatile than AT&T because Verizon's beta is higher than that of AT&T.

Option C is incorrect because Verizon is less volatile than the market because its beta is lower than 1.

If I bought 100 shares of Apple at $250 per share and sold them one year later at $310 per share, what is my total capital gain?

Capital gain = (Selling price - Purchase price) * Number of shares

Capital gain = (310 - 250) * 100

Capital gain = $6,000 (Option A is correct and C is incorrect)

Capital gain = (Selling price/Purchase price) - 1

Capital gain = (310/250) - 1

Capital gain = 0.24

Capital gain = 24% (Option B is incorrect)

jeff jeffy answered 2 years ago

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