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Pravin Kumar (article)     03 May 2016

Sfm query

Please solve my problem:

Historically, When the market return changed by 10% the return on the stock of Arihant ltd changed by 16%. If the variance of market is 257.81, then calculate the systematic risk of Arihant Ltd.



 3 Replies

Minu Sharma

Minu Sharma (Artcle)     03 May 2016

Beta of Stock = Change in Stock return / Change in Market return

                       = 16/10 = 1.6

Systematic risk of Stock = Market variance X (Beta Stock)^2

                                      = 257.81 X (1.6)^2

                                     = 660

Santosh Mahato

Santosh Mahato (CA student)     03 May 2016

Originally posted by : Minu Sharma
Beta of Stock = Change in Stock return / Change in Market return

                       = 16/10 = 1.6

Systematic risk of Stock = Market variance X (Beta Stock)^2

                                      = 257.81 X (1.6)^2

                                     = 660

Agree with Minu

Mahi Fatima

Mahi Fatima (Student)     04 May 2016

Originally posted by : Minu Sharma
Beta of Stock = Change in Stock return / Change in Market return

                       = 16/10 = 1.6

Systematic risk of Stock = Market variance X (Beta Stock)^2

                                      = 257.81 X (1.6)^2

                                     = 660

Great! I am agreed with Minu


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