Calculate average return for both stock and market Calculate Standard deviation for both Calculate coefficient of variation for both Calculate Beta of stock Suggest what you understand from Beta
Q No. 4
K Co. is a publicly listed company involved in the production of highly technical and sophisticated electronic components for complex machinery. It has a number of diverse and popular products, an active research and development department, significant cash reserves and a highly talented management who are very good in getting products to market quickly.
A new industry that K Co. is looking to venture into is biotechnology, which has been expanding rapidly and there are strong indications that this recent growth is set to continue. However, K Co. has limited experience in this industry. Therefore, it believes that the best and quickest way to expand would be through acquiring a company already operating in this industry sector.
Discussions taken place about the possibility of acquiring Tee Co. being acquired by K Co. Price of Tee company in stock market during last one year are as follows.
Price at the end of month
|
Month |
Month end Price |
KSE 100 INDEX |
|
Jan |
175 |
32600 |
|
Feb |
185 |
33900 |
|
March |
152 |
33500 |
|
April |
190 |
34000 |
|
May |
195 |
33500 |
|
June |
188 |
33800 |
|
July |
190 |
33700 |
|
Aug |
195 |
33200 |
|
Sep |
190 |
32900 |
|
Oct |
185 |
33100 |
|
Nov |
190 |
33900 |
|
Dec |
88 |
34100 |
QUESTIONS ( Note: ALL QUESTION WILL BE SOLVED IN MS EXEL WITH FORMULAS)
- Calculate average return for both stock and market
- Calculate Standard deviation for both
- Calculate coefficient of variation for both
- Calculate Beta of stock
- Suggest what you understand from Beta
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