GENERAL KNOWLEDGE

Detailed explanation-1: -If beta is greater than one, the returns on the company stock are more volatile than the market return. A company stock with beta greater than one is called an aggressive stock. If beta is less than one, the returns on the company stock are less volatile than the market return.

Detailed explanation-2: -A beta that is greater than 1.0 indicates that the security’s price is theoretically more volatile than the market. For example, if a stock’s beta is 1.2, it is assumed to be 20% more volatile than the market. Technology stocks and small cap stocks tend to have higher betas than the market benchmark.

Detailed explanation-3: -A beta of greater than 1 is classified as an aggressive stock while a beta of less than 1 is classified as a defensive stock.

Detailed explanation-4: -Interpreting Beta A of 1 indicates that the price of a security moves with the market. A of less than 1 indicates that the security is less volatile than the market as a whole. Similarly, a of more than 1 indicates that the security is more volatile than the market as a whole.

Detailed explanation-5: -Beta finance for aggressive portfolios means that the stocks tend to have a high beta or sensitivity to the overall market. Higher beta stocks normally experience larger fluctuations as compared to the overall market.