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Which explains how different stocks might need to have higher expected return based on the nature of their exposure to risk firm specific risk like
Which explains how different stocks might need to have higher expected return based on the nature of their exposure to risk firm specific risk like a whaling venture that might end badly means the expected return must be higher Any uncertainty about a company means the return needs to be higher High Beta Stocks that get hit harder by macro shocks need to have a higher expected return When we talk about the expected return on a stock we are talking about the best case scenario for firm outcomes
Which explains how different stocks might need to have higher expected return based on the nature of their exposure to risk
firm specific risk like a whaling venture that might end badly means the expected return must be higher
Any uncertainty about a company means the return needs to be higher
High Beta Stocks that get hit harder by macro shocks need to have a higher expected return
When we talk about the expected return on a stock we are talking about the best case scenario for firm outcomes
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