--%>

Compute betas against local indexes

Does it make any sense to compute betas against local indexes while a company has a great part of its operations outside such local market? I have two illustrations: BBVA and Santander.

E

Expert

Verified

Both the betas computed against local indexes and also those calculated against international indexes are not very helpful, as we can notice from the following graphs that demonstrate the betas of Santander calculated along with everyday data throughout the past 5 years.

64_figure1.png

   Related Questions in Corporate Finance

  • Q : Discretion can distort results Discuss

    Discuss how management’s discretion in applying accounting rules can mislead investors. Provide three examples and how the discretion can distort results?

  • Q : Explain any indisputable model for

    Is there any indisputable model for valuing the brand of a company?

  • Q : Determine the future value What would

    What would the future value after 5 years of $100 be at 10% compound interest?

  • Q : How could prestigious investment bank

    I have a doubt about the Enron case. How could this prestigious investment bank advice investing while the quotations of the shares were falling?

  • Q : What impacts have on value of a

    What impacts have on the value of a business of high inflation?

  • Q : What are the different types of

    What are the different types of mathematics found in quantitative finance?

  • Q : Explain market efficiency hypothesis

    According to what I read inside a book, market efficiency hypothesis means that the expected average value of variations is zero in the shares price. Thus, the best estimate of the future price of a share is its price now, as this incorporates all the available inform

  • Q : Commercial bank problems For an

    For an enhanced understanding of banking industry, it is significant to look at the atmosphere in which commercial banks operate. Production growth and globalization are two main forces reshaping the banking industry nowadays. The following two questions are associate

  • Q : Illustrates financial consultant has

    A financial consultant obtains various valuations of my company when this discounts the Free Cash Flow (FCF) as opposed to when this uses the Equity Cash Flow. Is it correct?

  • Q : Is Capital Cash Flow identical with

    Is Capital Cash Flow identical with Free Cash Flow?