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Beta Factor

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Beta Factor

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  • February 2, 2021 at 5:41 pm #608878
    adarsh1997
    Participant
    • Topics: 646
    • Replies: 282
    • ☆☆☆☆

    Hello John,

    From you lectures and notes, I’ve managed to understand systematic and unsystematic risk and the problem that arises with systematic risk. However regarding Beta factor, I am still having some difficulties to interpret it. I mean when we say that Beta factor is 1; what are we actually saying here?

    Thanks

    February 3, 2021 at 8:55 am #608925
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54664
    • ☆☆☆☆☆

    f the beta factor is 1 then it means that the share has the same risk as the average of the stock exchange (the market) as a whole.

    See page 100 of the lecture notes 🙂

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