Which one of the following stocks does NOT have a beta close to 1?
A) A stock that is part of the most dominant industry.
B) A stock that has a very high capitalization.
C) A newly listed stock.
D) The stock of a well-established firm.

Question

Quizplus · Accepted Answer

Newly listed stocks usually do not have enough data to calculate beta accurately, so it's less likely to have a beta close to 1. A beta close to 1 indicates the stock's volatility is similar to the overall market. Stocks from dominant industries (A) and well-established firms (D) typically have betas close to 1. High capitalization (B) can also influence the beta, but it does not necessarily mean it will be far from 1.

Which One of the Following Stocks Does NOT Have a Beta