These scenarios represent 3 companies that respond to the stock market in different ways. I need to understand what sort of beta they might have (meaning low, high, or average). I can't find enough information that reviews these kinds of situations in my background readings, so can you point me in the right direction?
- The ACME Umbrella company's stock goes up a lot when it rains, but goes down when it is sunny. Nothing else but the weather seems to impact ACME's stock price.
- Vultures, Inc., specializes in buying assets of bankrupt companies at a discount. Vultures' stock price seems to go up whenever other companies are doing poorly and going bankrupt, but goes down when other companies are doing well and they have few bankrupt companies to prey on.
- Unoriginal, Inc., can never decide what products they want to focus on so they make many different products in several different industries. They also invest much of their profits into 100 or so other companies that are listed on the stock exchange.