A security with a level of systematic risk that is the same as that of the market has a beta that is
1 answer:
Answer:
equal to 1
Explanation:
Beta refers to a coefficient that denotes the degree of responsiveness of security returns with respect to that of market return. Beta is calculated as,
=
which further means, beta is equal to deviation (risk) in security return w.r.t deviation (risk) in market return.
Beta is a measure of systematic risk which is, the market related risk to which whole of stock market is exposed to. Examples of systematic risk would be, change in the inflation rate, political instability, change in state of economy such as boom or recession, etc.
Systematic risk is not a company specific risk and thus, such a risk cannot be eliminated by a company via diversification of investments.
Thus, for a security whose systematic risk is equal to that of the market , it's beta will be equal to one which means the magnitude by which, the market falls or rises, the stock shall also fall or rise by the same margin. It also means the same direction of movement i.e if market rises, stock price would rise by same proportion and vice versa.
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- Hey there , ronisha!
Answer:
- Full settlement generally means DISCOUNT ALLOWED.
- Firstly , Read out the question and try to understand. It says we purchased some stuffs of Rs 30000 from the sansee stores and we payed Rs 28000 in full settlement which implies that we received the discount of Rs 30000-28000 i.e Rs 2000.
- You must have known the rules for debit and credit. As we know In case of personal account , Debit : The receiver , We have sansee stores as the receiver so we placed it in debit side.
- Remember: When the question says that the cash is payed through cheque , you should always consider cheque as a bank. Now , In the case of personal account , Credit : The giver. Who's the giver? Of course , bank! So , we placed it in credit side.
- Now , In case of nominal account , Credit : the incomes or gains . The question says we received the discount so obviously it's not expenses. So, We placed discount received in credit side. You must have studied that Every debit should have equal credit. And we're done!
- Hope this helps! Please let me know if you have any questions regarding my answer and also don't hesitate to reach out to me if you need any other help! :)
