¶ … Beta of CSX Railroad
Find the Beta of CSX
What is the estimated beta coefficient of CSX? What does this beta mean in terms of CSX to include them in my overall portfolio?
The estimated beta coefficient on CSX is 1.24. It is used to determine the underlying volatility in the stock. In general, when you see a beta factor greater than 1.0 this is an indication that the security is more volatile than the stock market average. In the case of CSX, the reading of 1.24 indicates that the stock is 24% more volatile than the major stock market averages. This will increase the overall amounts of volatility in the portfolio. While providing, a way to see above average returns, because of the increased volatility. ("Beta," 2010)
Given the beta of CSX, the present yield to maturity on U.S. government bonds maturing in one year (currently about 4.5% annually) and an assessment that the market risk premium (that is - the difference between the expected rate...
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