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In the January 25, 1991, issue of The Value Line Investment Survey, you note the following: Company Beta ( ) IBM 0.95 Bally Manufacturing 1.40
In the January 25, 1991, issue of The Value Line Investment Survey, you note the following:
| Company | Beta () |
| IBM | 0.95 |
| Bally Manufacturing | 1.40 |
| Cigna Corporation | 1.00 |
| British Telecom | 0.60 |
- How do you interpret these betas?
- Is it reasonable to assume that the expected return on British Telecom is less than that on IBM shares?
- Given that Cigna Corporation has a of 1.00, one can mimic the performance of the stock market as a whole by buying only these shares. Do you agree with this statement?
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Risk Management And Financial Institutions
Authors: John C. Hull
3rd Edition
1118269039, 9781118269039
