The following table shows the movement in the price of four individual shares over a period of five days from 24th October to 30th October 2007 and also in the BSE Sensex over the same period.
The figures show the risk-return scenario of different securities as also of the market as a whole. It is easy to calculate from the figures the return and the risk involved in the individual shares. The market return and risk can also be computed. And then, one can calculate the co-variance between the individual securities and the market index.
1. Calculate the average market return and risk in terms of standard deviation.
2. Calculate the return and risk of individual securities.
3. Calculate the co-variance between the individual securities and the market portfolio.
4. Calculate beta.
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