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Beta is used in finance is a measurement of how a stock's price has moved in relation to the overall stock market prices in the
Beta is used in finance is a measurement of how a stock's price has moved in relation to the overall stock market prices in the past. If a given stock has a beta equal to [Select] that means that the stock price moves in lockstep with the overall market or the average stock. On the other hand, if you have another stock and its beta is equal to [Select] , well, this tells us that the stock price is twice as volatile as the overall market or the average stock. On the other hand, if you have a stock that's got a beta of 0.5 then that stock has half as much volatility as the overall stock market or the average stock price. Therefore, beta is theoretically the correct way to measure a stock's [Select] The [Select] rate of return's symbol is an R-hat, and it's a statistical calculation, what we think will happen with the value of the stock in the future. The (Select] of return with the simple symbol of a lowercaser. It is all about a stock's riskiness. By comparing a given stock's riskiness to the volatility of the overall market, we can figure out just how much of a return an investor requires to make it worth their while. That's the Select] rate of return. And finally, there is the [Select ] rate of return. This one is denoted by an r-bar. [ Select ] yield versus [ Select ] yield versus [ Select] 1. These are three components of the discounted dividend model. That's a framework for figuring out what a given stock is worth. It looks at two things. How much you'll actually get paid each year by the company for holding the stock and how much the price changes annually. Let's start with our first part. What's called the [Select] is how much of a return are we getting from the distribution of profits by the company. The Select] is how much the stock's price has we changed each year. The last part is (Select] simply add those two previous components
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