Can you give me some information on BETA  i was on the impression that it measures VOLATILITY of a stock  .... when selecting stocks one looks for high BETA when selecting a stock or low BETA if you are looking for low risk  .... as a rule do indexes have a BETA weight

Thanks in advance

TT

Here's the description of beta from Morningstar Fundamentals page of TC2000 Help:

Beta - The coefficient which measures the volatility of a stock's returns relative to the market (S&P 500). It is based on a 36/60-month historical regression of the return on the stock onto the return on the S&P 500: Ri = a + (Rm) + e where Ri is the monthly total returns on the stock, a is the stock's Alpha, Rm is the monthly total returns on the market (S&P 500), and e is a random error term. A minimum of 12 monthly returns are required for this calculation. A beta of 1 means that the market and the stock move up or down together, at the same rate. That is, a 5% up or down move in the market should theoretically result in a 5% up or down move in the stock. A beta coefficient of 2 suggests that the stock will tend to fluctuate twice as much as the market. That is, if the market moves up 5%, then the stock should move up 10%. A beta coefficient of 0.5 indicates that the stock will move one-half as much as the market, either up or down. A negative beta indicates the stock tends to move in the opposite direction from the general market. That is, the stock price declines when the overall market is rising, or rises when the overall market is declining. Negative beta stocks are rare.

So while it is a measure of volatility to some extent, it is more a measure of the movement of the stock relative to the movement of the market. It tries to answer the question, "Does the stock move the same way as the market in general or does it move more slowly, more quickly or even in the opposite direction when the market as a whole is moving?"

Thanks for coming back on question

TT

You're welcome.