Saturday, January 22, 2011

Alpha and Beta of Stocks


Every investment involves two important aspects – returns and risk. And every investor wants to get the maximum returns with minimum risk. In this post is described the significance ofAlpha and beta parameters of the stock portfolio that are used to describe the two main risks inherent in investing in stocks. Alpha relates to factors affecting the performance of an individual stock or the fund manager’s skill in selecting the stocks while beta relates to market risks.

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