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1. For a stock, I am provided with only Probability % and Rate of Return %, how do I calculate Beta out of it?

2. If I am provided with the following:
Scenario 1:
Market rate = -8%
ROR(A) = -10%
ROR(B) = -6%

Scenario 2:
Market rate = 32%
ROR(A) = 38%
ROR(B) = 24%

how do I calculate the beta and the expected rate of return?

Any help is greatly appreciated.

2007-03-28 16:21:23 · 1 answers · asked by reddoublehe 1 in Business & Finance Investing

1 answers

The del = (-10 - (-6))/(-10 + (-6)/2)= 0.5
and market del = -8 - 0/ -8+0/2= -2 and beta = 0.5/-2=1-0.25=-0.75and expected return can be the denominator = - 8%
Similaryl for scenario 2
the del = 38-24/38+24/2=0.45
so beta = 45/32=1.406and expected rate of return is 31%

2007-03-29 00:59:38 · answer #1 · answered by Mathew C 5 · 0 0

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