question archive Question 4 If the common variance between Yazan Al-Saeedi Company and the Jordanian Financial Market = 6%, and the variance in the financial market = 3%, find the market risk for Yazan Al-Saidi Company 1
Question 4 If the common variance between Yazan Al-Saeedi Company and the Jordanian Financial Market = 6%, and the variance in the financial market = 3%, find the market risk for Yazan Al-Saidi Company 1
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Question 4 If the common variance between Yazan Al-Saeedi Company and the Jordanian Financial Market = 6%, and the variance in the financial market = 3%, find the market risk for Yazan Al-Saidi Company 1.2 0.75 1.5 Ο Ο Ο Ο 2o
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Answer
Option D. 2
Working
Covariance between Yazaan Al Saaedi Company and Financial Market = 6%
Variance of Financial market = 3%
Market Risk for Yazaan Al Saaedi Company = Beta of Yazaan Al Saaedi Company
Beta of Yazaan Al Saaedi Company = Covariance between Yazaan Al Saaedi Company and Financial Market / Variance of Financial market
Beta of Yazaan Al Saaedi Company = 6%/3%
Beta of Yazaan Al Saaedi Company = 2
Market Risk for Yazaan Al Saaedi Company = 2
Other options are incorrect based on above mentioned working
