Question: (a) Estimate the beta value for Company C, using the covariance-variance approach. (b) Identify the practical measurement issues arising from the use of (i) the

(a) Estimate the beta value for Company C, using the covariance-variance

(a) Estimate the beta value for Company C, using the covariance-variance approach.

(b) Identify the practical measurement issues arising from the use of

(i) the monthly share prices;

(ii) the sample period;

(iii) FTSE100.

Company C, a newly listed company on the Alternative Investment Market (AIM) of the London Stock Exchange. You observe the following information. Feb Jan Dec Nov Oct Sep Month A (share price at end of month in pence) 256 259 239 248 238 230 FTSE100 (index) 7693 7720 7740 7687 7350 7390

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