Define beta risk

Q: Define Continuous probability distribution

A: Probability Distribution: It is the list of values where each outcome is linked with the…

Q: Explain the concept of the world beta of a security

A: World beta is the measure of the volatility of returns of a stock or portfolio to the world stock…

Q: Define stand-alone risk

A: Stand-alone risk:This refers to the risk linked with a single aspect of a firm or any particular…

Q: explain what is the risk-return principle with one example

A: The risk-return principle is a fundamental concept in finance that states that the potential return…

Q: What is fundamental beta?

A: Introduction: Beta is nothing but a metric used to assess a portfolio’s uncertainty or risk, with a…

Q: Suppose the risk free rate (rfr) = 5%, average market return (rm) = 10%, and the required or…

A: Expected return = Risk free rate + beta * (market return - risk free rate )

Q: beta value on risk-return ratio

A: The risk-return ratio measures the return in terms of risk for a specified period of time. The…

Q: Explain the difference between a linear risk and a nonlinear risk.

A: Linear risk is an enterprise's risk, based on the traditional economic system of "take-up-dispose."…

Q: Consider the CAPM. The expected return on the market is 18%. The expected return on a stock with a…

A: We are given following details : Expected return on market = 18% Beta = 1.2 Expected return on stock…

Q: F G H Monthly Monthly Еxcess Excess return for Market Stock 1 Returns 0.09 0.03 -0.07 0.01 0.02 0.02…

A: Risk and return are two main components of investment. Beta a measure which shows the degree of risk…

Q: Calculate the risk neutral probability

A: Risk neutral probability = (er*Δt - d)/(u-d) r is risk free rate. Δt is time period between each…

Q: Discuss the Beta of  as measure of systematic risk.

A: In finance systematic risk refers to that risk which is inherent to the entire market. As the risk…

Q: Define risk

A: Risk can be defined as whenever there are chances that the investments’ actual outcomes are…

Q: Unlevered Beta is ? How it can be calculated?

A: Unlevered Beta: Unlevered beta is the beta of the firm without the impact of leverage or debt…

Q: Define unlevered beta

A: Unlevered beta can be defined as the ungeared beta of a company which does not take effect of…

Q: Suppose that we can describe the world using two states and that two assets are available, asset K…

A: The term "risk-neutral probability" is used in finance and economics to describe the probability…

Q: What risk does Beta measure?

A: There are two types of risks: 1) Systematic risk 2) Unsystematic risk 1. Systematic risk : It is…

Q: State 1 2 3 Pr(a) 0.2 0.6 0.2 Given the probability distribution above, determine (Calculate) and…

A: Risk and return:  The connection between risk and return is a cornerstone of the investment process.…

Q: what is the risk-free rate (rf)?

A: Risk free rate is also called as treasury bill rate. This treasury bill rates are free from default…

Q: What is unlevered beta?

A: Unlevered Beta also known as asset beta is used to measure the market risk of the corporation…

Q: Explain the significance of BETA as a measure of Systematic risk.

A: Beta is a metric that is used by investors for the purpose of analyzing the risk of a security or…

Q: Define conditional value at risk (CVaR)

A: The question is based on the concept of conditional value at risk , it is a risk assessment process.…

Q: What is the difference between smart beta ETFS and index ETFS?

A: Smart beta exchange traded funds (ETFS) is a systematic approach which gives the advantage of active…

Q: What is the expected risk-free rate of return if Asset X, with a beta of 1.5, has an expected return…

A: Required return = risk free rate + beta  * market retrun - beta* risk free rate

Q: define liquidity black hole

A: When liquidity is depleted, trading financial assets becomes affordable and asset prices fall…