Why is beta a measure of systematic risk? What is its meaning?
Question:
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 62% (16 reviews)
Beta measures the responsiveness of changes in excess returns for the security involved to c...View the full answer
Answered By
Pushpinder Singh
Currently, I am PhD scholar with Indian Statistical problem, working in applied statistics and real life data problems. I have done several projects in Statistics especially Time Series data analysis, Regression Techniques.
I am Master in Statistics from Indian Institute of Technology, Kanpur.
I have been teaching students for various University entrance exams and passing grades in Graduation and Post-Graduation.I have expertise in solving problems in Statistics for more than 2 years now.I am a subject expert in Statistics with Assignmentpedia.com.
4.40+
3+ Reviews
10+ Question Solved
Related Book For
Fundamentals Of Financial Management
ISBN: 9780273713630
13th Revised Edition
Authors: James Van Horne, John Wachowicz
Question Posted:
Students also viewed these Finance questions
-
Why is beta a measure of market risk for a security?
-
The Caterpillar Company has a beta (a measure of common stock volatility) of 1.28. What is its estimated cost of equity capital based on the CAPM when the risk-free interest rate is 2.5%?
-
Market equity beta measures the covariability of a firms returns with all shares traded on the market (in excess of the risk-free interest rate). We refer to the degree of covariability as systematic...
-
Elena, a student in F-1 immigration status from Romania, is on the basketball team. She arrived in the U.S. on June 18, 2023 on a full athletic scholarship that includes $10,000 for her room and...
-
On June 15, 2013, Baileys Department Store purchased $4,300 of inventory on account from one of its suppliers. The terms were 3/15, n/45, FOB shipping point. On June 18 Baileys Department Store paid...
-
Consider a cache of 4 lines of 16 bytes each. Main memory is divided into blocks of 16 bytes each. That is, block 0 has bytes with addresses 0 through 15, and so on. Now consider a program that...
-
A face-centered cubic array of round fibers is shown in Figure 3.6. Derive the relationship between the fiber volume fraction and the given geometrical parameters. What is the maximum possible fiber...
-
Henry ODonnell created an inter vivos trust fund. He owns a large department store in Higgins, Utah. He also owns a tract of land adjacent to the store used as an extra parking lot when the store is...
-
In order for a business to control costs, it must first identify the costs that can be incurred and the nature of these costs. It is critical that managers are able to identify what causes costs, as...
-
Elizabeth is moving from a one bedroom apartment in one city to a similar apartment in another city. She has been quoted a flat fee for the truck rental and has two estimates for wages of the movers...
-
Define the characteristic line and its beta.
-
What is the required rate of return of a stock? How can it be measured?
-
What is the difference between front-office Information systems and back-office information systems?
-
What are some of the advantages of holding companies? Identify a disadvantage.
-
How are preliminary levels of debt, preferred stock, common stock, and dividends projected?
-
What is a holding company?
-
How are operating items projected on financial statements?
-
What are some defensive tactics that firms can use to resist hostile takeovers?
-
In Problems 942, find the real solutions, if any, of each equation. x = 3x
-
For a nonzero constant a, find the intercepts of the graph of (x 2 + y 2 ) 2 = a 2 (x 2 - y 2 ). Then test for symmetry with respect to the x-axis, the y-axis, and the origin.
-
Are securities that provide for a sinking fund more or less risky from the bondholders perspective than those without this type of provision? Explain.
-
Whats the difference between a call for sinking fund purposes and a refunding call?
-
Why are convertibles and bonds with warrants typically offered with lower coupons than similarly rated straight bonds?
-
You have been asked to interview for a position in South Korea after graduating college with your business degree and being honorably discharged from the military. While you spent time in Spain and...
-
Cathy, an Aboriginal woman, is being supported by staff after the loss of her home and her son in a bushfire. Explain how staff should communicate with Cathy to respond to her needs in relation to...
-
3. Social media simultaneously draws us together and pulls us apart; does the good outweigh the bad or vice versa? Discuss your views on whether the good outweighs the bad or vice versa.
Study smarter with the SolutionInn App