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Choose beta as the most difficult to estimate

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Reference no: EM131343940 , Length: word count : 150

Question 1
Most of people choose beta as the most difficult to estimate. Some argue that beta is easy to calculate, as it is simply a formula.

The Formula for Beta is:

beta= [Covariance(r, Rm)] / [Standard Deviation(Rm)]2

Where:
r is the return rate of the investment;
Rm is the return on the market portfolio.

How would you respond?
Write in 150 words and references.

Reference no: EM131343940

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