Calculating beta from raw data using regression
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The CFO has requested from you, a risk assessment of Strident Marks. Think about the risks inherent in Strident Marks and how to quantify these risks. Download the data provided and calculate the measure of risk for this company (defined as Beta in the Capital Asset Pricing Model - CAPM) and explain why this calculation is a measure of risk. Discuss when this type of calculation is appropriate, and when the coefficient of variation is an appropriate measure of risk.
Attached is the raw data. I will write the paper. I need the calculation done, and an explanation of the type of calculation and why it is a measure of risk. No need to be too lengthy on the explanation. I will do the research later.
Thanks in advance
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Solution Summary
The solution calculates the beta from raw data using regression and provides easy to understand interpretation of the regression. It provides steps how we can make use of Excel software to run regression to caculate the beta for a stock.
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See the attached file. Thanks
The beta is calculated by running regression between access return on ABC (dependent variable) and access return on market(independent variable)
In a well diversified portfolio the only risk which is relevant is the risk related to the market. The company ...
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