Get reliable answers to your questions at Westonci.ca, where our knowledgeable community is always ready to help. Experience the ease of finding quick and accurate answers to your questions from professionals on our platform. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals.
Sagot :
Answer:
Note: These values are not from this question, as this question is incomplete and lacks necessary data. So, in order to solve this question and deliver you the main concept. I have chosen some random values.
Answer is explained in the explanation section.
Explanation:
Solution:
Data Given:
This question is about the two well known Canadian Stocks namely:
1. Toronto Dominion Bank
2. Research in Motion.
Data For Toronto Dominion Bank:
For answering about the proportion of risk involved in each of stocks, we just need the value of [tex]R^{2}[/tex].
Note: These values are not from this question, as this question is incomplete and lacks necessary data. So, in order to solve this question and deliver you the main concept. I have chosen some random values.
[tex]R^{2}[/tex] value for TDB = 0.77
[tex]R^{2}[/tex] value of 0.77 means, 77% of the risk is derived from the market movements. So we can say it as this 0.77 or 77% of proportion for Toronto Dominion Bank is of market risk.
Generally speaking, in market risk there is the probability that people will lose their investments due to the factors that create negative impacts on the market.
Whereas, specific risk is totally opposite to market risk and people specific to any company or group may experience losses but not the whole market, which is the case in market risk.
Where as, remaining 0.23 or 23% of the risk is unique risk or specific risk.
Similarly for the other stock:
[tex]R^{2}[/tex] value for Research in Motion = 0.44
[tex]R^{2}[/tex] value of 0.44 means 44% of the risk is derived from the movements of the market or it is market risk. On the other hand, remaining 0.66 or 66% of the risk is specific risk or unique risk.
Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. Westonci.ca is your trusted source for answers. Visit us again to find more information on diverse topics.
