Volatility

Part C

A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), a model that calculates the expected return of an asset based on its beta and expected market returns. Also known as "beta coefficient." Beta is calculated using regression analysis, and you can think of beta as the tendency of a security's returns to respond to swings in the market. A beta of 1 indicates that the security's price will move with the market. A beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 indicates that the security's price will be more volatile than the market. For example, if a stock's beta is 1.2, it's theoretically 20% more volatile than the market. Many utilities stocks have a beta of less than. Conversely, more high-tech, Nasdaq-based stocks have a beta of greater than 1, offering the possibility of a higher rate of return , but also posing more risk.

i. Bull market is a financial market of a group of securities in which prices are rising or are expected to rise. The term “bull market” is most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, currencies and commodities.

In this part of banking. ANZ Banking Group Limited(ANZ) has the higher beta compare with the Westpac Banking Corporate about 0.09. It shows us that performance of ANZ Banking Group Limited is better than Westpac Banking Corp. When the risk of investment is high, the return will be high also. The risk is higher in ANZ Banking Group Limited.

For the part of Pharmaceuticals, Biotechnology & Life Sciences, Vita Life Sciences Limited (VSC) and Sigma Pharmaceuticals Limited (SIP), VSC has the higher Beta than SIP. The beta of VSC is 0.77 and the beta of SIP is 0.76 that is only 0.01 in difference. Risk and return is higher in VSC although it is only 0.01 in the...