Chapter Two - The Highlights

  • provide a means for converting real figures into nominal terms and vice versa;
  • discuss the merits of real risk-free rates versus nominal figures;
  • show how the risk-free rate can be determined and examine the merits of the various financial instruments that can be used as a proxy;
  • identify factors that drive beta;
  • explain the difference between equity betas and asset betas;
  • consider all the measurement difficulties associated with beta;
  • show how betas vary across the FTSE 350;
  • evaluate different data providers for beta;
  • look at what beta measurement statistics tell us.
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