BETA CALULATION OF A

COMPANY
Returns on sensex and Jaya Infotech

YEARS MARKET RETURN JAYA INFOTECH

Rm (%) RJ (%)

1 18.6 23.46

2 -16.5 -36.13

3 63.83 52.64

4 -20.65 -7.29

5 -17.87 -12.95
ESTIMATION OF BETA
YE MARKET JAYA Square
AR RETURN INFOTECH Rm-Rv Rj-Ra (4) X (5) (Rm-
S Rm % Rj % Rv)
(1) ( 2) (3) (4) (5) (6) (7)
1 18.6 23.46 13.11 19.51 255.91 171.98

2 -16.5 -36.13 -21.98 -40.08 880.83 483.08

3 63.83 52.64 58.35 48.69 2841.35 3404.8

4 -20.65 -7.29 -26.13 -11.24 293.64 682.96

5 -17.87 -12.95 -23.35 -16.90 394.57 545.35

Rv=5.48 Ra=3.95 Sum= Sum=

Mean Mean 4666.3 5288.2
 Multiply deviations of the market returns and
deviations of Jaya’s returns (column 6). Take
the sum and divide by 5 (no of obersvations)
to get covariance
 Cov = 4666.30/5 = 933.26

Calculate the squared deviations of the

market returns (column 7) Take the sum and
divide by 5 to find the variation of market
return.
 = 5288.23/5 = 1057.65
 Divide the covariance of the market and jaya
by the market variance to get beta

 Beta = 933.26/1057.65= .88