I found an inconsistency in the Stalla materials Lets say you have a Size Beta (SMB) of .05, Does that make you small cap or large cap? Stalla contradicts themselves. I went in thinking it was the sign that determined it. So if you have a Size beta of (-.05) then you were clearly large cap. If you were (+.05) then you were almost neutral but still small cap. Which one is it?
Don’t be bringing that weak ass Stalla game up in here, sonny…this is Schweser territory. P.S. - I have no idea what you’re talking about, don’t even remember reading anything that you’re asking.
Neither, it’s closer to small cap but more mid cap. Large cap would be more negative I would think.
A positive beta indicates an increase in sensitivity to that risk type of risk or independent variable
I agree, going with the sign as the determinant. skillionaire, it was in the Equity section - a question on the Pastor-Stambaugh Model. In the CFAI texts it is on p127.
CFAI texts? You might as well be speaking Greek…if it ain’t in Schweser, I don’t know it. Thanks for the heads up, though, taking a look now - anyone got a SS and/or an LOS?
Oh, I got it now - it’s what JP_RL said - your initial question threw me the fugg off - the beta’s got nothing to do with the size of the company, it’s simply the sensitivity, as was already stated. Good luck all.
Glad I asked about this. There was a related question on this. I think I got that one right.