WHERE TO FIND BETAS

Major brokerage firms calculate the betas of securities they trade, and then publish their calculations regularly in what are called beta books. In these books, you can look up the estimated betas of publicly traded companies, along with some other useful statistics. This is a simple and easy way to compare a large number of betas in a short period of time.

The formula analysts use to calculate beta looks like this:

In other words, the beta of a firm equals the volatility of the firm divided by the volatility of the market, multiplied by the degree to which the two are alike.

Unless you enjoy solving complicated equations, you can save some time and trouble by simply finding yourself a beta book.

Now let's review what we have learned.