Reply With Quotewell, in linear regression, we assume a line equation: Y hat= Constant + bX
where b is beta value; or in other words, with Y=C+bX, b is the slope of that line
Hello,
I am working on how to calculate a Beta for a security. I have learnt it in the excel but I dont know why Slope function is used to calculate Beta. Can any one explain me? Thanks in advance...
well, in linear regression, we assume a line equation: Y hat= Constant + bX
where b is beta value; or in other words, with Y=C+bX, b is the slope of that line
Whenever Both y & x are normalised variables then coeff. b in y= ax + b becomes Beta.
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