Is volatility factor of a stock and the beta of a stock is the same thing ?
For eg. the Volatility factor is 0.65Rs. so does the beta of a stock is 0.65?
Complete Qus is –
The current market price of an equity share of a company is Rs. 1000, and the volatility factor of a stock is Rs. 0.65. In case market return is 15 % and T-bill rate 7 %.
Calculate Ke ?
yes the volatility factor and the beta factor are same in this case becase the definition of beta is the change in share required rate of return for a percent change in the market risk premium which defines volatility too
the answer to the problem is 12.2%