Abstract:

(The association between the Beta coefficient and accounting based measures of risk: the İstanbul Stock Exchange) Through spectacular corporate failures like Enron and during the current global financial crisis, the spotlight has once again turned to the importance of corporate risk assessment and public disclosures. The purpose of our study is to explore the relationship between market risk (as measured by the Beta coefficient) and accounting based measures of risk and to find out which of these measures possess statistically significant explanatory power. In order to fulfil that objective we collect data on all nonfinancial firms quoted at the Istanbul Stock Exchange (ISE) during 1998-2006 and carry out multivariate linear regressions. We find that, firm size and current ratio together explain 28.6% of the variability in the market based beta coefficient (P

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