A SPECIAL AND UNDERVALUED STOCK MARKET

All the statistics in Exhibit 11.4 wore computed using returns to the stock market indexes rather than individual stocks. 4. Formally, the world beta is defined as βi = σiW / σW2, where σiW is the covariance between returns to the ith market and the world market index, and σW2 is the variance of the world market return. If, for example ... ................
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