--%>

Calculated betas when they give different information

Calculated betas give different information if they are acquired by using weekly, monthly or daily data.

E

Expert

Verified

Since betas calculated with historical data as follows:

1) Change many from one day to other;

2) Depend upon that stock market index was considers as a reference;

3) Depend many on which historical period (as 5 years, 3 years…) is used in the computation;

4) Depend on that returns (as monthly, yearly…) are used in the computations;

5) We do not know whether they are higher or lower than the betas of other companies and

6) They have almost no concern to the posterior return of the shares. The correlation of the regressions also which are used in the computation of betas is almost always very low.

   Related Questions in Corporate Finance

  • Q : Corporate Earnings Analysis exercise

    Identify two comparable corporations.  Explain why you think they are comparable to your corporation. Earnings analysis:  Do an earnings analysis of your corporation.  Calculate and plot.

    Q : Who explained the high-peak/fat-tails

    Who explained the high-peak/fat-tails?

  • Q : Bond Price Information What is Bond

    What is Bond Price Information: Answer: Corporate bond market is not considered to be much transparent as it trades predominantly over the counter and investors do n

  • Q : Data Case Please assist with the

    Please assist with the attached Data Case assignment

  • Q : How companies accuse investors make

    Sometimes, companies accuse investors of performing credit sales which they make their quotations fall. Is it true?

  • Q : Minimum annual savings problem XYZ

    XYZ Company is interested in purchasing a new corporate jet for $6 million. This will depreciate the jet completely in 5 years and then sell it for $5 million. The jet will utilize $60,000 in fuel annually, and its maintenance will be $40,000 yearly. The tax rate of X

  • Q : Structure of Interest rates Which

    Which determines the shape of the term structure of Interest rates?

  • Q : FIN3000 Corporate Finance Task

    Task Description Length: 1000-2000 words (up to 500 words above 2000 permitted) Description: • Complete this assignment in groups of 4-5 students. • Maintain a portfolio of financial issues taken from 8 news sources. • Analyse the articles with reference to theory covered in class and h

  • Q : Explain breakthroughs on

    Explain breakthroughs on low-discrepancy sequences.

  • Q : MIRR & IRR Projects Answer using

    Answer using Microsoft Word and your answer should be between 100 and 150 words Question1. Identify the major