Beta and the Capital Asset Pricing Model (CAPM)
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Beta and the Capital Asset Pricing Model (CAPM)

Intuition Publishing Pty Ltd
Updated Sep 23, 2020

A stock's beta measures the volatility of the stock's price relative to market volatility. Stocks which are more volatile than the market will have betas greater than one and vice versa. Beta is a vital component of the cost of equity calculation. Here show how beta and the cost of equity are calculated.

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