Your company is following two stocks, ABC plc and XYZ plc, and your manager tells you the

Question:

Your company is following two stocks, ABC plc and XYZ plc, and your manager tells you the following: ‘The shares of ABC plc have traded close to £15 for most of the past 4 years, and because of this lack of price movement the stock has a very low beta. XYZ plc, on the other hand, has traded as high as £90 and as low as its current £20. Since this stock has demonstrated a large amount of price movement, the stock has a very high beta.’ Do you agree with your manager’s analysis?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Corporate Finance

ISBN: 9780077173630

3rd Edition

Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe

Question Posted: