Hello The first question is to how to the formula used in this problem. This is a question that you have previously answered, but i dont understand how we can use R squarred to find the standard Deviation. The second question is about Beta squarred multiplied with the SD squarred for the market index. What does this mean specifically, i have understood this as being the Systematic Risk? but what else is it used for
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Hello
The first question is to how to the formula used in this problem. This is a question that you have previously answered, but i dont understand how we can use R squarred to find the standard Deviation.
The second question is about Beta squarred multiplied with the SD squarred for the market index. What does this mean specifically, i have understood this as being the Systematic Risk? but what else is it used for
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