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SOUD SAEED says
February 10, 2015 at 11:24 pm
Hi Mr Moffat,
Is the risk which we calculated using the standard deviation in the previous lectures, is it systematic risk based on the assumption of diversified portfolio? Or it is the total risk, also used in calculation of systematic & unsystematic risk (? total2 = ?systematic2 + ?unsystematic2)?
My apologies the formula above is not so clear.
May 23, 2014 at 7:24 pm
Hi we calaculted Beta to be 2.64 in this example. Why is is when you mention it you dont round it up but down is that the genereal rule? that Beta is 2 not 3? Many thanks
John Moffat says
May 23, 2014 at 9:11 pm
I do not think I ever said you don’t round up but round down! You must have misheard me.
We usually quote beta to two decimal places.
Where rounding is involved (anywhere in the exam) you round up or down to the nearest number. (If it is .5 then it doesn’t matter whether you go up or down )
February 24, 2013 at 10:58 am
Hello, I think I left this comment on the wrong topic! Not sure how that happened. But I was a bit confused in example 3, does standard deviation = market risk? thanks
June 9, 2012 at 7:10 am
Dear Admin! It is working now! Thank you very much!
June 8, 2012 at 9:32 pm
Dear OT! I somehow do not hear the sound for that particular lecture! Could you please help me?
June 8, 2012 at 10:48 pm
@nailya1908, maybe you have clicked ‘mute’ button on the video player controls?
June 8, 2012 at 9:27 pm
Dear OT! You make my life easy! Thank you very very much!!! )))
March 3, 2012 at 9:08 am
I hope i’m corrrect when i add that they are thesame. Use of the two terms arises when comparing risk of one sector (e.g petroleum) against that of the market as a whole.
somebody please correct me if i am wrong.
August 7, 2012 at 2:28 pm
@blackpaddy, See what I have written in answer to the question below.
February 17, 2012 at 6:32 pm
what is the difference between systematic risk and market risk?
February 25, 2012 at 5:24 am
@yelen, same thing
March 6, 2012 at 5:28 am
Beta is systematic risk divided by market risk. In the example 2 systematic risk is 8%, market risk is 10%
So they are not the same..
March 6, 2012 at 10:53 am
@yelen, In this context, the systematic risk is the individual company’s risk, and the market risk refers to the whole companies’s risk in the stock exchange.
The difference is only about the amount but nature is the same.
@kateker, You are correct that the nature is the same, but be careful about the wording.
“Market risk” is the risk of the stock exchange as a whole (i.e. the average of the risks of all shares on the stock exchange).
The “systematic risk” of a particular share is that risk due to general economic factors (and risk due to factors peculiar to the company – “unsystematic risk” is ignored on the assumption shareholders have well-diversified portfolios.
(The risk of the market as a whole is only systematic because the market as a whole is perfectly well diversified).
Some shares have higher systematic risk than the market, and some have less. The risk of the market is the average of all of them.
September 26, 2011 at 11:34 am
September 16, 2011 at 1:31 pm
y cnt i see any of the videos
July 29, 2011 at 12:24 pm
thanks to opentuition……. for providing to students a very very useful and helpful study stuff………!!!1
May 16, 2011 at 9:35 pm
I always found this confusing but this surely simplified it for me. Thanks
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