www.financial-terms.co.uk


Home
Definitions



Compare
Debt


Beta equation (security)

The financial definition for Beta equation (security):

The market beta of a security is determined as follows: Regress beta of stock y on excess returns of the market. The slope coefficient is beta. Define n as number of observation numbers. Beta= [(n) (sum of [xy]) ]-[ (sum of x) (sum of y)]/ [(n) (sum of [xx]) ]-[ (sum of x) (sum of x)] where: n = # of observations (usually 36 to 60 months) x = rate of beta for the S&P 500 index y = rate of return for the security. Related: beta




Similar Matches

Regression equation

Regression equation
An equation that describes the average relationship between a dependent variable and a set of explanatory variables.




Click to compare definitions of Beta equation (security)
Click to view definitions beginning be
  www.financial-terms.co.uk is a finance, business, investment and stock market resource of common financial words.