tfin202 group assignment part 2.docx - Unit Name Corporate Finance Unit code TFIN202 Assignment Group assignment Contribution Equal Group Members Sajib

tfin202 group assignment part 2.docx - Unit Name Corporate...

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Unit Name: Corporate Finance Unit code: TFIN202 Assignment: Group assignment Contribution: Equal Group Members: Sajib Giri (20193015) Anubhav Pyakurel (20187174) Ratima Wuttitanadech (20183015) Abdul Zohab khan (20187096) Anish Aryal (20193152) Due date: 14 october, 2019
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1. Beta is a measure of security’s systematic risk, describing the amount of risk contributed by the security to the market portfolio, the beta company’s asset is simply a weighted average of betas of its equity’s and its debt. Beta is used capital asset pricing model (CAPM) to calculate expected return of an asset. By using beta calculation financial specialist understand weather a stock moves in the same direction as the rest of the market, beta is very important in finance because it helps to measure the risk of the investment. Beta calculation formula is: Beta coefficient( β ) = Covariance ( R e , R m )/ variance ( R m ) Where, R e = the return on an individual stock R m = the return on the overall market 2. Asset beta can be found in part 1 because the number show on the both graph that variable 1 on the y-axis and x-axis. The calculating beta is the covariance of the return of an asset with the return of the benchmark divided by variance.
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