Why Should an Investor Invest in a Negative-Beta Stock Knowing

question 33

Essay

Why should an investor invest in a negative-beta stock knowing that it will have an expected return lower than the risk-free rate?

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Definitions:

Self-actualization

The actualization of one's abilities and potential, seen as an innate motivation or requirement in every person.

Brand-loyal

Refers to consumers who consistently purchase the same brand over alternatives due to preference, satisfaction, or perceived value.

Price-sensitive

Describes consumers or markets that are highly responsive to changes in prices, where demand significantly fluctuates with price adjustments.

Family Brand

A firm’s own corporate name used to brand its product lines and products.