ased on five years of monthly data, you derive the following information for the companies listed: Company SDi rm Padma 11.10% 0.82 Meghna 12.60% 0.63 Jamuna 6.60% 0.45 Karnafully 9.70% 0.70 SD on Market 7.60% 1.00 Compute the beta coefficient for each stock.

ased on five years of monthly data, you derive the following information for the companies listed: Company SDi rm Padma 11.10% 0.82 Meghna 12.60% 0.63 Jamuna 6.60% 0.45 Karnafully 9.70% 0.70 SD on Market 7.60% 1.00 Compute the beta coefficient for each stock.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter11: Investment Planning

Section: Chapter Questions

Problem 5FPE

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Concept explainers

Stock Market Indices

Stock indexes are used to compare the price fluctuations of a group of stocks of similar companies, which are combined based on a similar industry or a particular market capitalization limit or type of market. The price comparison is based on a pre-determined standard method or indicators. These stock indexes are usually considered a base for comparison of a particular stock, and the performance of that particular company can be easily determined.

Question

Based on five years of monthly data, you derive the following information for
the companies listed:

Company	SDi	rm
Padma	11.10%	0.82
Meghna	12.60%	0.63
Jamuna	6.60%	0.45
Karnafully	9.70%	0.70
SD on Market	7.60%	1.00

Compute the beta coefficient for each stock.

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