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What is the basis of the beta for investment decision and can you explain the usefulness and relevance of the concept of the beta in the investment?

Beta describes the relationship between the volatility of a stock with respect to the market as a whole (which the market represented by a suitable index). A beta of less than one means that the stock is less volatile than the index, and vice-versa. Basically, if a benchmark returns 10%, and you're considering a stock with a beta of 1.5%, that means the stock needs to have a return of greater than 15% for it to be worthwhile. The related link contains much more information


How do stock dividends affect stock indexes?

The stock that forms the part of the index will have a weight in the index, i.e. how much the movement of that stock affects the movement of the index. When a dividend goes ex, this will trigger a 'drop point' on the index. This is calculated from the value of the dividend, the weight in the index and the fx rate, if the stock is priced in a different currency from the index. When a dividend goes ex, the price of the underlying stock will open that morning lower by the amount of the dividend. This usually doesn't have a huge effect as the percentage change is well within day trading movements of a stock anyhow. The same applies for the level of an index move - the index will open lower by the drop point amount, but will generally be negligible on the movements of intra-day trading anyhow. You may have to be careful with special dividends, as they can be a higher percentage of the stock trading price, which may actually cause a noticeable drop in intra day trading price. They can also affect index levels. Dividends have a different effect on options though, but generally the price of a basic call / put would already have been adjusted before the ex-date. If you have a structured product, for example a vertical spread consisting of 2 long and 2 short options, then your position won't be affected as what you lose on one you will make on the other. If you have a time spread where your position is dependant on the stock price staying where it is, then you need to do further analysis on your Greeks and how it will affect option price. Thanks.


How can one determine if a stock is oversold?

One can determine if a stock is oversold by looking at technical indicators such as the Relative Strength Index (RSI) or the Moving Average Convergence Divergence (MACD). If these indicators show that the stock price has dropped significantly and is lower than its true value, it may be considered oversold.


How can one learn how to read stock index?

One can learn how to read stock indexes by studying financial news, analyzing market trends, and understanding the performance of different companies in the stock market. It is important to learn about key economic indicators and how they impact stock prices. Additionally, seeking guidance from financial experts or taking courses on investing can also help in understanding stock indexes.


How would you choose to buy a particular stock?

for buying a stock a investor must go through firstly for the company's profile that whether it is new one or reputed one. then one should look in the market trend of the stock of the company, can say by looking simple moving average index of the stock, which show the relative strength or weakness of the stock. then an individual should also look for its objective that whether he/she wants to buy high risk n return or balance kind of return of the stock.

Related Questions

What is SandP TSX composite index exactly?

The S&P TSX composite index deals with stocks specific to the Toronto Stock Exchange. One can find further specifics on these stocks and others on the official website.


Where can one check the stock exchange in Jakarta?

The best website for checking any global market, including the Jakarta Stock Exchange Composite Index, is Bloomberg's easy-to-navigate, real-time website.


What is ticker symbol for Toronto stock index?

there isnt one.


Does a composite index have more than one attribute?

It can but it need not. It could have more than one components.


Where can one find more information about stock index futures?

You can find a lot of information on stock index futures from newspapers, financial magazines, on TV news, and online. You can easily go online and go to Google finance or CNBC and look at the stock index futures.


Sensex stands for?

Sensex is the Index value of one of the stock exchanges in india - the Bombay Stock Exchange (BSE)


How does one use an index future?

An index future is a "cash-settled futures contract on the value of a particular stock market index". Index futures are used in investments, trading, and hedging.


Can you purchase a composite stock for a marlin 915Y?

According to Marlin, No they do not. I can not locate one myself


What is a composite index?

You can create an index for a table to improve the performance of queries issued against the corresponding table. You can also create an index for a cluster. You can create a compositeindex on multiple columns up to a maximum of 32 columns. A composite index key cannot exceed roughly one-half (minus some overhead) of the available space in the data block.Use the SQL command CREATE INDEX to create an index. CREATE INDEX emp_ename ON emp_tab(ename);


How does one go about buying stock in The Hershey Company?

To start buying stock in The Hershey Company Company one would need to open an account with a brokerage firm and elect which stock they wish to buy. Beginners should start with a mutual fund or stock index which tracks overall performance of the index. One can always get more information on stocks from their broker.


How many stocks are there in the NASDAQ Index?

One of the most widely followed indexes is the NASDAQ Composite Index. Representing over 3,000 companies, it began on February 5, 1971.


How many stocks are in the nasdaq index?

One of the most widely followed indexes is the NASDAQ Composite Index. Representing over 3,000 companies, it began on February 5, 1971.