Question

Beta Questions for Starbucks: Beta is 0.7611231

1. Is your company's beta positive? What does it mean for investors in that stock? 2) Is your company's beta above 1 in absolute value? What does it mean for the stock returns? 3) Would you consider adding the stock to your investment portfolio based on the beta you found? Why or why not?

Answer 1

1. Yes, the beta is positive. It means the volatility of market changes to our stock is around 76%. if the Industry is going good, then it is not a good investment and if the industry is on fall, then the loss of these stocks would be lesser as compared to the market.

2. This means that our stocks are volatile than the market. if anything changes in industry, we are the first one getting effected whether it is positive or negative.

3. I would add this stock because the company is safer thyan other companies in the market and this would be a good investment being a pessimistic person.