Mention the formula of calculating beta in security
analysis?
Answers were Sorted based on User's Feedback
Answer / sufi..
β= (cov s,m)/(var m)
where cov s,m is the covariance of the security price with the market and
var m is the variance of the market.
Is This Answer Correct ? | 3 Yes | 0 No |
Answer / john
Beta is a measure of the companies non systematic risk with
respect to the market's systematic risk. Mathematically,
beta is the coefficient of regression between the company's
stock trading and the market. Suppose, the company is
trading on S&P 500, and the company in question is
microsoft. Then we will have to obtain a data set of a
sufficiently large sample of daily stock prices of microsoft
and the S&P 500 index. We will have to regress these two
data sets (S&P 500 daily index value, and microsoft daily
stock price) for our chosen sample size. The reported
coefficient of regression of this regression analysis, will
be the required beta for microsoft. A sample size of about 2
years of data should be safe. However, at times one may have
to clean this data by removing events which are unexpected
and do not represent general market movements and
conditions.
Is This Answer Correct ? | 5 Yes | 3 No |
Give Any Three Characteristics of a Company?
0 Answers Joint Stock Company,
What is NABARD and tell some of its functions?
0 Answers State Bank Of India SBI,
Mention the formula of calculating beta in security analysis?
2 Answers India Infoline, TATA,
What are your views on the performance of India Paralympics?
What is mudra bank?
Budgetary control? cash profit? cash credit? live stock?
What is the role of banks in the development of the economy?
Can I Erase My Student Loans By Filing Bankruptcy?
What Is Retail Or Consumer Banking?
What is limit for HL under priority landing?
what is the effect of crr hike on market?
Different types of capital issues