Can betas be negative? (and other well used interview questions)
aswathdamodaran.substack.com
Here is a favorite question among corporate finance interviewers: " Can betas be negative? And if so, what exactly do they tell us?" The reason negative betas pose a conundrum to many finance students is that they seem to go against intuition. After all, if a beta of one is average risk and a beta of zero is riskless, how can an investment have negative risk?
Can betas be negative? (and other well used interview questions)
Can betas be negative? (and other well used…
Can betas be negative? (and other well used interview questions)
Here is a favorite question among corporate finance interviewers: " Can betas be negative? And if so, what exactly do they tell us?" The reason negative betas pose a conundrum to many finance students is that they seem to go against intuition. After all, if a beta of one is average risk and a beta of zero is riskless, how can an investment have negative risk?