Introduction to Corporate Finance

7: Risk, Return and the Capital Asset Pricing Model

FIGURE 7.2A SCATTER PLOT OF MONTHLY RETURNS FOR OROTONGROUP LIMITED AGAINST THE ASX 200 INDEX

−15%

−10%

−5%

0%

5%

10%

15%

–15% –10% –5% 0% 5% 10% 15%

OrotonGroup Limited monthly return (%)

ASX 200 Index Monthly return (%)

Slope = beta = 1.4

FIGURE 7.2B SCATTER PLOT OF MONTHLY RETURNS FOR AGL ENERGY LIMITED AGAINST THE ASX 200 INDEX

−15%

−10%

−5%

0%

5%

10%

15%

−15% −10% −5% 0% 5% 10% 15%

AGL Energy Limited Monthly return (%)

ASX 200 Index Monthly return (%)

Slope = beta = 0.4