foundation of risk

sessiljoseph
Good Student
Posts: 22
Joined: Sat Apr 26, 2014 7:29 am

foundation of risk

Postby sessiljoseph » Wed Apr 30, 2014 5:57 am

relationship between cyclic nature and Bi,m for CAPM model
a. Bi,m<0 implies that asset A and market returns are complementary
b. Bi,m>1 implies that asset A and market returns are complementary
c. Bi,m<1 implies that the stock is having the same cycle patterns as the market
d.Bi,m<0 implies that asset is risky
can u explain me what is complementary in nature

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

foundation of risk

Postby edupristine » Wed Apr 30, 2014 8:24 am

Complementary would mean, if the market returns increases, the asset return falls. This is same as having a correlation coefficient of -1.


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