I have a question from my tutorial asking whether

Can a risky asset have negative beta coefficient?

I can only think of how this is possible only if risk-free rate is more than the expected returns, are there any other reasons for such?

  • Does a short contract count as an asset? – The Photon Oct 10 '20 at 18:12
  • I don't know the rules but I'd say yes. It would seem to me that a put and a call would be also apply. – Bob Baerker Oct 10 '20 at 20:08

Negative beta means that the security moves in the opposite direction of the index that it's being compared to.

  • In what applications can this be applied? (other than diversification?) – JJ Lin Oct 10 '20 at 5:58
  • I don't know other than as a hedge. – Bob Baerker Oct 10 '20 at 20:09

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