The concept of beta has gained prominence due to the pioneering works of Sharpe (1963), Lintner (1965) and Mossin (1966). There are many studies that examine the behaviour and nature of beta. These studies include the impact of the length of the estimation interval, the stability of individual security beta as compared to portfolio beta, factors influencing the beta as well as the stability of beta in various market conditions.
In theory, market capitalisation weighted indices are preferred as compared to equally weighted indices due to the fact that they are superior proxies and are consistent with the true market portfolio. Some practitioners argue that there is a perceived segmentation between the Resources, Financial and Industrial sectors on the JSE and consequently prefer to use the Financial and Industrial Index as an overall market proxy for stocks belonging to this category. Choosing the correct market index in order to regress against, is a vital aspect. Stambaugh (1982) identifies that the CAPM tests are generally insensitive to the choice of market proxy. However, many believe that the broader the selected indices, the better the market proxies. In the UK market, the two main indices used are the FT 100 which is made up of the top 100 companies and the FT All Share Index which is made up of all companies traded on the exchange.
The length of the estimation period is also significant in the estimation of beta. Blume (1971) depicts empirically that the stability of individual beta increases as the time of the estimation period increases. Similar results were obtained by Altman (1974) and Baesel (1974) who with the use of monthly data, estimated beta for estimation periods of one year, four years, six years and even ni...
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...phases. Fabozzi and Francis (1977) conducted a study testing the differential effect of bull and bear market conditions for 700 individual securities listed on the NYSE. It was found that the estimated betas of most of the securities were stable in both market conditions. However, Ray (2010) conducted a similar study over a period of ten years using monthly returns of 30 stocks. The results obtained were both mixed and inconclusive. Bowie and Bradford (1997) found that the tests of beta stability are difficult to interpret on their own. Gombola and Kahl (1990) suggest that an OLS estimate of beta requires an estimation period during which the relationship between the market return and the stock return remain stable. However, without this stability, an alternative for forecasting a time-varying relationship such as the Bayesian adjustment process will be required.
The estimates of cost of capital for equity 6.14% are making by using the capital asset pricing model (CAPM) to generate forecast of DDM and RIM. This method is defined by the sum of risk free rate plus beta that multiplied with a risk premium. Particularly, the beta, which is a quantitative measure of the volatility of company stock relative to the unstable of the overall market, found in JB HI-FI case at 0.56 (JB HI-FI financial statement 2016). It
When I found out I qualified to be a candidate for the NJHS, I knew I had to take this chance. This group is made up of people who depict leadership, character, citizenship, academic success, and service and I would love to join. These characteristics wouldn't just be valuable for a candidate to have, but for everyone to have to exceed in life. If I were to be in the National Junior Honor Society, it would give me an opportunity to ameliorate my future and motivate me to do better.
In “The Fish” by Elizabeth Bishop, the narrator attempts to understand the relationship between humans and nature and finds herself concluding that they are intertwined due to humans’ underlying need to take away from nature, whether through the act of poetic imagination or through the exploitation and contamination of nature. Bishop’s view of nature changes from one where it is an unknown, mysterious, and fearful presence that is antagonistic, to one that characterizes nature as being resilient when faced against harm and often victimized by people. Mary Oliver’s poem also titled “The Fish” offers a response to Bishop’s idea that people are harming nature, by providing another reason as to why people are harming nature, which is due to how people are unable to view nature as something that exists and goes beyond the purpose of serving human needs and offers a different interpretation of the relationship between man and nature. Oliver believes that nature serves as subsidence for humans, both physically and spiritually. Unlike Bishop who finds peace through understanding her role in nature’s plight and acceptance at the merging between the natural and human worlds, Oliver finds that through the literal act of consuming nature can she obtain a form of empowerment that allows her to become one with nature.
Spirituals: African American spirituals are a key contribution to the creation of the initial genre of jazz. African Americans used spirituals during the earliest turmoil of slavery. These spirituals were used as songs to sing during labor and an initial way of communication for the Underground Railroad. These African American folk sounds mixed with gospel hymns were sun fused with instruments such as the harmonicas, banjos, and other instruments that could primarily be found. This initial form of the music started to separate itself from the gospel rendition. This mixture of different styles of music fused and gave birth to such things as minstrel shows, ragtime, and other forms of music. The most important that spirituals truly helped develop, was Jazz. Spirituals were the first true form of Negro expression in the form of music. Marshall W. Steams, Professor of English Literature at Hunter College states that “The spiritual was created out of nowhere by a sort of spontaneous combustion of Negro’s genius” (125). This mixture of hymns and instrumental instruction took form into one of the most versatile genres known to date, Jazz.
The theme death has always played a crucial role in literature. Death surrounds us and our everyday life, something that we must adapt and accept. Whether it's on television or newspaper, you'll probably hear about the death of an individual or even a group. Most people have their own ideas and attitude towards it, but many consider this to be a tragic event due to many reasons. For those who suffered greatly from despair, living their life miserably and hopelessly, it could actually be a relief to them. Death affects not only you, but also those around you, while some people may stay unaffected depending on how they perceive it.
The Hunger Games was a critically acclaimed movie when it came out; however, some critics would argue that the movie can be sometimes too violent for its intended audience. In this essay I would dissert Brian Bethune’s essay “Dystopia Now” in order to find its weaknesses and compare the movie Battle Royale with his essay.
Godard called Alphaville ‘ a film about light. Lemmy is a character who brings light to people who no longer know what that is.’ (Godard,cited in Brody,2008,p229). The first image we are shown is that of a bright flashing light.It opens the film with a hypnotic flicker, its intensity unsettling. It reappears as a car’s headlight, then becomes the car’s indicator signalling a left turn. Later on it’s a light bulb swinging back and forth, the flash of Caution’s instamatic camera, the flicker of fluorescent ceiling lights, the suggestion of neon lights. The flashing light is characteristic of modernity and appropriate to Alphaville, but it’s also crucial in itself (without interpretation) as a filmic image.
...ar press, or through existing historical accounts. Through our pilot study, we have demonstrated variance in the formation of asset bubbles surrounding the introduction of significant new technologies. While we find general support for our predictions, the current stage of this work is rudimentary: much work is left to be done.
We analyzed the market for two weeks to determine when the equity market would turn from a bearish to bullish market. Without a change in the market and a declining bond price, we decided to invest in equities according to our investment strategy, which brought us into the second phase of our portfolio. Therefore, at the beginning of February we bought shares in Sirius, Microsoft, Neon, Washington Mutual, and Nike. As assumed, the equity market continued to plummet decreasing the value of all our stocks except for our Gold Corporation stock.
Capital Asset Pricing Model (CAPM) is an ex ante concept, which is built on the portfolio theory established by Markowitz (Bhatnagar and Ramlogan 2012). It enhances the understanding of elements of asset prices, specifically the linear relationship between risk and expected return (Perold 2004). The direct correlation between risk and return is well defined by the security market line (SML), where market risk of an asset is associated with the return and risk of the market along with the risk free rate to estimate expected return on an asset (Watson and Head 1998 cited in Laubscher 2002).
Howells, Peter., Bain, Keith 2000, Financial Markets and Institutions, 3rd edn, Henry King Ltd., Great Britain.
Asset allocation decisions made by an investor are considered more important than other decisions such as market timing or security selection. In the research provided by Hensel (1991), performance attribution is one of the main components when choosing the right assets in a portfolio. The impact of any investment decision can be measured by comparing its outcome with the outcome of some alternative decision. Furthermore, according to Hensel (1991), every investor has to incorporate the minimum-risk portfolio, which is a combination of securities or asset classes that reduces the uncertainty of future portfolio returns to a minimum.
... while using the beta approach as a guide. Returns may also rely on general market swings, changes in interest rates and inflation, to changes in national income and other economic factors.
I like to say I have two homes; one in the arms of my family and close friends and one in the arms of nature. The best thing about it is that there isn’t one physical location. I will always have a place that I consider home and my home will change and evolve as I do. Merriam-Webster defines “home” with six phrases, most of which talk about a physical location and a particular setting with a certain group of people. However, I define home as where I feel relaxed and comfortable, where I can be understood, and where I am in harmony with my surroundings. Home is where I learn about life and where I have found the meaning of life. Every significant event in my life or times when I have learned the most important lessons, I have been surrounded by family or the great outdoors or both. I can’t write my life story without talking about these experiences.
The Modern portfolio theory {MPT}, "proposes how rational investors will use diversification to optimize their portfolios, and how an asset should be priced given its risk relative to the market as a whole. The basic concepts of the theory are the efficient frontier, Capital Asset Pricing Model and beta coefficient, the Capital Market Line and the Securities Market Line. MPT models the return of an asset as a random variable and a portfolio as a weighted combination of assets; the return of a portfolio is thus also a random variable and consequently has an expected value and a variance.