Very Short Question Answer 1. Differentiate between expected return and required return? The expected return refers to the rate of return expected from an investment. On the other hand required rate of return is the rate of return that an investment must earn to compensate against the level of risk involved in it. Expected return […]
Chapter 4 : Risk and Return
Short Questions Answer Beta coefficient Beta coefficient, denoted as ßj, is the measure of diversifiable risks. This is defined as the degree of movement in an asset or security’s return in response to the overall market return. Symbolically, it is expressed as. j=COVjM / Varm Where, j = Beta coefficient for security ‘j’. COVjM = […]