Question
I have question one answered I just need help with 2 and 3 Thank you :) Part 2. Using beta estimates from financial websites. Internet
I have question one answered I just need help with 2 and 3
Thank you :)
Part 2. Using beta estimates from financial websites. Internet Exercise. Go to the website Yahoo! Finance and type in the letters "RIO" in the search box and select Rio Tinto. You should now be directed to a Summary page where you will be able to view the beta for Rio Tinto. Note: RIO is the stock symbol for Rio Tinto Plc, a worldwide mining and mineral processing company.
Question 1: As reported by Yahoo! Finance, what is the beta for RIO?
For questions 2 and 3, note there are two characteristics associated with beta, (1) the sign of beta, either a positive value or a negative value (a positive beta is usually shown without a plus sign when reported at financial websites) and (2) the magnitude of beta, where the absolute value of beta can be < 1.00, = 1.00, or > 1.00.
The beta for RIO is 1.30 so, >1.00
Question 2: Does the expected return on RIO stock move in the same direction or in the opposite direction in comparison to the return in the stock market? Explain which of the two characteristics of beta would tell you this and what it means for RIOs beta.
Question 3: Is RIO stock less risky or more risky than the market? Explain which of the two characteristic of beta would tell you this and what it means for RIOs beta.
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