Your company is following two stocks, ABC plc and XYZ plc, and your manager tells you the
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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?
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Related Book For
Corporate Finance
ISBN: 9780077173630
3rd Edition
Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe
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