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Investment Strategies Essay Topics & Paper Examples

Investment Strategies Order Number

There are many methods an investor can use to determine if a stock is a good buy or not. Three indicators often used to assess the risk of a security are beta, alpha and the Sharpe ratio. One of the most popular measures of risk associated with a security is its beta. Beta is a measure of a stock’s volatility in relation to the market as a whole. The market is given a beta of 1. 0 and individual stocks are ranked according to how much they deviate from the market’s beta. Stocks with a beta of less than 1. 0 are considered less volatile than the market and, therefore, pose less risk. Stocks that have betas higher than 1….