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Beta

Beta. The beta is a measure of a stock’s price volatility in relation to the rest of the market. In other words, how does the stock’s price move relative to the overall market . Example: DNB .67 Less than 1 means that the risk is lower than the market average. Beta.

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Beta

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  1. Beta • The beta is a measure of a stock’s price volatility in relation to the rest of the market. In other words, how does the stock’s price move relative to the overall market. • Example: DNB • .67 • Less than 1 means that the risk is lower than the market average

  2. Beta • Stocks that have a beta greater than 1 have greater price volatility than the overall market and are more risky. • Stocks with a beta of 1 fluctuate in price at the same rate as the market. • Stocks with a beta of less than 1 have less price volatility than the market and are less risky

  3. Beta - Risk • Risk also implies return. Stocks with a high beta should have a higher return than the market. If you are accepting more risk, you should expect more reward. • Investors can find the best use of the beta ratio in short-term decision-making, where price volatility is important. If you are planning to buy and sell within a short period, beta is a good measure of risk.

  4. Book Value - definition • The value at which an asset is carried on a balance sheet. To calculate, take the cost of an asset minus the accumulated depreciation.Example: DNB & WFM • Read more: http://www.investopedia.com/terms/b/bookvalue.asp#ixzz1nL4tw3S1

  5. 1. It is the total value of the company's assets that shareholders would theoretically receive if a company were liquidated.2. By being compared to the company's market value, the book value can indicate whether a stock is under- or overpriced.Read more: http://www.investopedia.com/terms/b/bookvalue.asp#ixzz1nL59N9w6

  6. Price – Earnings Ration (P/E ratio) • A valuation ratio of a company's current share price compared to its per-share earnings.Calculated as: • Market Value per ShareEarnings per Share (EPS) • For example, if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock would be 22.05 ($43/$1.95). • Read more: http://www.investopedia.com/terms/p/price-earningsratio.asp#ixzz1nL7DuZPX

  7. Earnings per Share (EPS) • portion of a company’s profit allocated to each outstanding share of common stock. For instance, a corporation that earned $10 million last year and has 10 million shares outstanding would report earnings of $1 per share.Read more: http://www.answers.com/topic/earning-per-share#ixzz1nL9pK2Cz

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