10-6 Measuring Market Risk Example - continued S When the market was up 1%, Turbo average %o change was +0. 8% o When the market was down 1%. Turbo average %o change was.8% O The average change of 1.6%(-0.8 to 0.8) divided by the 2%(1.0 to 1.0)change in the market produces a beta of 0. 8 Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001
©The McGraw-Hill Companies, Inc.,2001 10- 6 Irwin/McGraw-Hill Measuring Market Risk When the market was up 1%, Turbo average % change was +0.8% When the market was down 1%, Turbo average % change was -0.8% The average change of 1.6 % (-0.8 to 0.8) divided by the 2% (-1.0 to 1.0) change in the market produces a beta of 0.8. Example - continued
10-7 Measuring Market Risk Example - continued O When the market was up 1%, Turbo average %o change was +0.8% s When the market was down 1%o. Turbo average change was -0.8% OThe average change of 1.6%o(-08 to 0.8) divided by the 2%(-1.0 to 1.0)change in the market produces a beta of 0.8 B 2 0.8 Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001
©The McGraw-Hill Companies, Inc.,2001 10- 7 Irwin/McGraw-Hill Measuring Market Risk B = = 0.8 1.6 2 When the market was up 1%, Turbo average % change was +0.8% When the market was down 1%, Turbo average % change was -0.8% The average change of 1.6 % (-0.8 to 0.8) divided by the 2% (-1.0 to 1.0) change in the market produces a beta of 0.8. Example - continued
10-8 Measuring market Risk Example - continued Turbo return 0.8 0.6 0.4 Market Return 0.2 0 0.20.8-0.6-040.200204060.81 -0.4 -0.6 -0.8 Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001
©The McGraw-Hill Companies, Inc.,2001 10- 8 Irwin/McGraw-Hill Measuring Market Risk Example - continued -0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1 -0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1 Market Return % Turbo return %