Question

What are differences between the beta and the standard deviation (sigma)? I need to write at...

What are differences between the beta and the standard deviation (sigma)?
I need to write at least one page for this question but i don't have much ideas. Can you give me some ideas?
I recommend you give me the point-form answer which I can use to write my own answer after doing research.

Homework Answers

Answer #1
  1. The beta is measure the stocks volatility in the degree to the price that fluctuates in relation to the market and the standard deviation is measure the volatility of return in an investment but the things that beta and standard deviation measure are used in the analysis of the risk in investment portfolio.
  2. The beta is use by the company to calculate the capital assetpricing model (CAPM). On the other hand, the company estimate the portfolio of theinvestment is uses the standard deviation.
  3. Beta shows the sensitivity of a fund’s, security’s, orportfolio’s performance in relation to the market as a whole. Standard deviation measures the volatility or risk inherent to stocks and financial instruments.
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