Explain the concept of the world beta of a security, Financial Management

Assignment Help:

Explain the concept of the world beta of a security.

Answer:  The world beta calculates the sensitivity of returns to a security to returns to the world market portfolio. It is a compute of the systematic risk of the security in a global setting. Statistically, the world beta can be illustrated as:

                 Cov(Ri, RM)/Var(RM),

In which Ri and RM are returns to the I-th security and the world market portfolio, correspondingly.


Related Discussions:- Explain the concept of the world beta of a security

Define arbitrage process, Q. Define Arbitrage Process ? The basic theor...

Q. Define Arbitrage Process ? The basic theory of the MM approach if we ignore the taxes is that the total value of a firm should be constant irrespective of the degree of leve

What, differentiate between pricing and allocative efficincy

differentiate between pricing and allocative efficincy

Importance of mutual funds in the investment intermediaries, Define the imp...

Define the importance of mutual funds in the investment intermediaries. Mutual funds: Mutual funds pool resources by several companies and individuals and invest these re

#titApplicability of an operating cycle, Discuss the applicability of an op...

Discuss the applicability of an operating cycle in cabbage growing business in Uganda.

Cost-volume-profit models, Bennis Shafts produces three types of golf club ...

Bennis Shafts produces three types of golf club shafts which it sells to golf club manufacturers.  Prepare ONE worksheet to answer the following questions and to determine the outc

Is it possible to make money in the stock market, Is it possible to make mo...

Is it possible to make money in the stock market when the quotations are going down? What is credit sale? There are three simple moves to make money when prices are going down:

measuring yield spreads, A yield spread between any two bond issues ...

A yield spread between any two bond issues can be easily computed when the maturity date for both these issues is same. The yield spread between these two bond

What are retained earnings, What are retained earnings?  Why are they impor...

What are retained earnings?  Why are they important? Retained earnings denote the sum of all the earnings obtainable to common stockholders of a business throughout its whole h

What is benchmarking, What is Benchmarking "A continuous, systematic pr...

What is Benchmarking "A continuous, systematic process for evaluating the products, services and work processes of an organisation that are recognised as representing best prac

Valuation and exit - hedge fund, Valuation and Exit Valuation: The Net ...

Valuation and Exit Valuation: The Net Asset Value is used as a base for ascertaining the prices applicable to investor subscriptions and redemptions. Fund administrator perform

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd