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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Beta Equity
Hello SIr,
just a small clarification
If Beta Equity is more than 1 for a particular project, does this always mean that the riskiness of the new project is more responsive to changes in market (will fluctuate more than normal)
and less than 1, indicating the opposite ??
Yes – >1 means that it fluctuates more than the average (the market) and is more risky. Less than 1 means that it fluctuates less than the market and is less risky.
thank you !! 😀
You are welcome 🙂
John
Business risk is another name for unsystematic risk ?
No – for systematic risk!
I do suggest you watch the free lecture on CAPM.