Beta (β) is calculated using the formula: β = Cov(Ri, Rm) / Var(Rm), where Ri is the return of the individual stock, Rm is the return of the market, Cov(Ri, Rm) is the covariance between the stock and market returns, and Var(Rm) is the variance of the market returns.

Authors

• Person: Not available Organization: Pressbooks
  Chapter 8 – Risk and Return – Fundamentals of Finance

Sources

• Chapter 8 – Risk and Return – Fundamentals of Finance pressbooks.pub Pressbooks via serper

Referenced by nodes (2)

• stocks concept
• variance concept