Beta refers to the volatility of a particular stock compared against the volatility of the entire stock market or, in practice, a representative index of that market, such as the Standard and Poor's (S&P) 500. Beta is an indicator of how risky a particular stock is and is used to evaluate its expected rate of return. Beta is one of the fundamentals stock analysts consider when choosing stocks for their portfolios, along with price-to-earnings ratio, shareholder's equity, debt-to-equity ratio and other factors. Here's how to calculate beta and use beta to figure an expected rate of return.

Steps
Calculating Beta for a Stock
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Find the risk-free rate. This is the rate of return an investor could expect on an investment in which his or her money is not at risk, such as U.S. Treasury Bills for investments in U.S. dollars and German Government Bills for investments that trade in euros. This figure is normally expressed as a percentage. -------------------------------------------------

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Determine the respective rates of return for the stock and for the market or representative index. These figures are also expressed as percentages. Usually, the rates of return are figured over several months. * Either or both of these values may be negative, meaning that investing in the stock or the market (index) as a whole would mean a loss against the investment during the period. If only 1 of the 2 rates is negative, the beta will be negative. 3....

...Resolved Question
I need to calculatebeta of the company's stock?
eg: returns for co. are -5%, 5%, 8%, 15% and 10% over 5 years.
the returns for stock exchange are -12%, 1%, 6% 10% and 5% for the same 5 years.
How to compute the beta of the company's stock?
* 5 years ago
* Report Abuse
anilwyd
Best Answer - Chosen by Asker
Bete is measure of Risk.
Year 1 Beta = -5/12 = 0.42
Year 2 Beta = 5/1 = 5
Year 3 Beta = 8/6 = 1.33
Year 4 Beta =10/10 = 1
Year 5 Beta = 10/5 = 2
Overall Beta for five Year = -5+5+8+15+10/(-12+1+6+10+5)
= 3.3
It means , when Index moves @ 1% the Company Share will move by 3.3%
The more the Bete , the more the Risk. also Return.
So be carefull in investing in Companies having high Beta.
The first thing you should know about stocks before adding them to your portfolio is that they carry a certain amount of risk. This is because the returns on stock are not guaranteed; not by the government, not by the company issuing the stock, and certainly not by your broker. That means that there is a chance that your actual return will be different than what you had expected. For instance, you might purchase stock under the expectation that its price will rise steadily over time and that it will pay you annual dividends. However, if the company experiences financial problems,...

...You have saved enough money to make a down payment of 10% and will finance the balance using a 30-year fixed rate loan from your old college roommate who is now a mortgage banker. The current mortgage rate on such loans is 5 ½ % (APR).
(a) Compute the monthly payment using the PMT function in Excel and then prepare an amortization table. Fully amortize the loan by going out to the last payment.
(b) Calculate both total $ payments for the stream of payments, the stream of principal payments, and the stream of interest payments. Also calculate the present value of these 3 streams. [To calculate the present value of interest and principal payments, you will need to use the NPV function, rather than the PV function, since the cash flows in the principal and interest columns are not constant throughout time.] What do you observe when you look at these numbers? Explain.
(c) Using your amortization table, what is the principal that remains to be paid after you have completed 15 years of payments? How does this figure relate to the payments that you have already made? How does this figure relate to your remaining payments? Explain.
(d) Suppose that you had bought this house in June of 2006 under the terms described above. Since that date, the average house has declined in value at the rate of 1% per month. [This is the national average for the 3-year period ending summer 2009.] Assuming that...

...How to Calculate Preferred Dividends
Preferred stock (or preference shares) is a special class of stock that pays a fixed dividend set at the time of issuance. Also, preferred dividends must be paid before common stock dividends. To calculate the dividends for preferred stocks, you need to multiply the par value of the shares by the dividend percentage.
Example 1:
If the dividend percentage is 8 percent and the preferred stock was issued at $20 per share, then the annual dividend is: 8% * $20 = $1.60 per share.
Example 2:
If you owned 10,000 6.5 percent preferred shares which were issued at a par value of $50 per share, then:
The dividend per share of preferred stock = $50 * 6.5% = $3.25
Total Preferred Dividends = 10,000 shares * $50 * 6.5% = $32,500
Suppose the preferred stock is trading at $60 per share, and you want to calculate thedividend yield:
Dividend Yield Ratio = (Dividend Per Share / Market Price Per Share) * 100% = (3.25 / 60) * 100% = 5.4%
UNDERSTAND EQUITY MARKET- PREFERRED STOCK
Preferred stocks (or preference shares) are different from common stocks. They generally do not have voting rights on matters of corporate policy, their dividends are fixed and preference dividends will be paid prior to common share dividends.
Generally, there are four different types of preferred stock: participating preferred stock, cumulative preferred stock, non-cumulative preferred stock, and convertible preferred...

...procedures has occurred in the past 25 years. The first intravenous injections were experimented with in 1642 by a gentleman’s hunting servant in eastern Germany. Similar experiments were done in 1655 by Christopher Wren in Oxford England and a group of scientists around the physicist Robert Boyle. These experiments were prompted by new knowledge about blood circulation provided by William Harvey in 1628, because of lethal accidents the infusions soon fell from favor.
So, let us hop into the 21st century and imagine that you have been working outside in the heat all day and you feel very dehydrated and need to be rushed to the hospital. Well, step into the world of a nurse and learn how to do this difficult task. First, the calibration of the drip is necessary, the volume is necessary, and how many minutes are necessary in what you are trying to find. You, the patient, are getting a certain amount of saline solution through the IV tubing. There will be 50cc IVPB, (Intravenous-Piggy-Back) which is a small volume parental solution for intermittent infusion at the same time, over 30 minutes using IV tubing with a calibration of 10. There would be 20 drops per minute.
Select “x = minutes”
X= 30
Volume= 50
Calibration= 10
50X/ 10-30 = 16.7 or 17 gtt/min or drops/min
The drip rate is the number of drops per minute to be infused. The drip factor of the tubing is found on the manufacturer’s...

...How to Calculate Sales
Per Square Foot
Retailers use this
data to examine differences in same-
store sales over time. Corporate
analysts use this data to compare
sales in different store locations of a
retail chain, regardles of store size.
This comparison can aid in deciding
which locations to expand and which
to contract. In addition. Sales per
square foot is also by commercial
property owners used to determine
to determine the appropriate level of
rent to charge a store.
Steps (Tap on step to mark as
complete)
Step 1 of 4
Examine sales records to
determine the time period
you wish to measure. Sales
per square foot can indicate
yearly or monthly sales.
Generating both sets of data
allows you to see store
performance year-to-year as
well as month-to-month.
Step 2 of 4
Generate net sales figures for
the time period in question.
Net sales are equivalent to
gross sales (the total dollar
amount of products
purchased at the retail
location) less returns (the
total amount of those
products returned to the
store for a refund). As an
example, assume gross sales
of $350,000 and returns of
$50,000, resulting in net sales
of $300,000.
Step 3 of 4
Obtain retail square footage
data for the store in question.
The total retail square footage
includes all area where stock
is displayed, but does not
include bathrooms, receiving
areas or areas behind
counters. For the example,
assume a total retail...

...
BETA MANAGEMENT COMPANY
Q1. Calculate the variability (standard deviation) of the stock returns of California REIT and Brown Group during the past 2 years. How variable are they compared with Vanguard Index 500 Trust? Which stock appears to be riskiest?
The stock returns for each month are given in Table 1. Based on the monthly returns, the standard deviation or variability of each stock has been calculated. The standard deviation for California REIT is 9.23% and the standard deviation for Brown Group is 8.17%. This standard deviation is the monthly standard deviation for each of the stocks. On the other hand the standard deviation of Vanguard Index 500 Trust is 4.61%. This shows that the standard deviation of both the individual stocks is double of the standard deviation of the market. Based on the standard deviation of both the stocks, it can be concluded that the California REIT stock is more risky as compared to Brown Group. This shows that the returns of the California REIT stock disperse or deviate more frequently as compared to its average means. This means that the returns are volatile for this stock and therefore, this stock is the riskiest.
Q 2. Suppose Beta’s position had been 99% of equity funds invested in the index fund, and 1% in the individual stock. Calculate the variability of this portfolio using each stock. How does each stock affect the variability of the equity investment,...

...Growth rates and how to calculate them.
Growth rates can be tricky to calculate and interpret and many people get confused. So here’s how to
get ahead of everyone.
Let’s start with a time series where we know the answer. In the example below, X starts at 100, grows
3%, then falls back again, then grows 3% again. So over the three years, it has grown from 100 to 103.
1
Year
2000
2001
2002
2003
Average
CAGR
2
3
4
X
Growth X
DlnX
100
103
0.03 0.0295588
100 -0.0291262 -0.0295588
103
0.03 0.0295588
0.01029126 0.00985293
0.00990163
Column 3 calculates by Xt/Xt-1 -1 and column 4 by ln(Xt)-ln(Xt-1), click on the spreadsheet to check.
What can we say?
1. look at column 3. Growth 2000 to 2001 is +0.03, but from 01-02 is -0.029. That means that
using this growth rate, X does not quite return to where it was in 2000. This is clearly wrong,
since column 2 shows that it does. This is a problem in using growth rates, due to the fact that
the base year is 100 in the 00-01 and 103 in the 01-02 period, so the sum of the growth rates
does not get you back to where you started.
2. now look at column 4. Using the natural logs solves this problem: the rise from 100 to 103 is
exactly the same as the fall from 103 to 100, so you end up where you started. So this is a good
property. However, as you can see, the change in natural logs does not quite give the same
answer as the growth rate: so between 2000 and 2001, the...

...How to Calculate your adjusted Active Duty service date (ADSD) and resulting year group (YG). See MILPERSMAN 1000-030 for definition of ADSD. The year group is the fiscal year in which an adjusted ADSD falls. To determine your adjusted ADSD and YG, follow these steps:
1. Total all active service time, including active component (regular Navy) service, mobilization, ADSW, ADT, AT, CANREC, and voluntary recall. Do not include drills (inactive duty training (IDT), inactive duty training travel (IDTT)), or funeral honors) in this calculation. Add 1 day as an inclusive day.
2. Subtract the total active service time calculated in Step 1 from the opportunity Start Date listed in the advertisement.
3. The resulting year, month, and day is your ADSD.
4. The fiscal year in which the date in Step 3 falls is your YG.
Example: Advertised start date of opportunity: 1 February 2013
Step 1: Total all prior active service time.
6 years 1 month 19 days Active Component (Regular Navy)
1 year 0 months 0 days Mobilization
0 years 0 months 46 days AT (Two 15 day and one 16 day ATs)
0 years 6 months 0 days ADSW
3 years 0 months 22 days CANREC Recall
0 years 0 months 1 day Inclusive day
10 years 9 months 28 days Total active service time
Step 2: Subtract the time calculated in Step 1 from the advertised start date of the opportunity. Keep in mind that when borrowing from the yrs column, use 12 and when borrowing...