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Ibm Risk Profile

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Risk profile
Let’s start our analysis of risk profile of IBM by comparing Betas of companies who operate in Tech industry. A beta coefficient tells us how much systematic risk a particular asset has relative to an average asset (which has beta equal to 1). As we can see IBM has less systematic risk than an average asset. IBM Apple Microsoft Sony Dell HP Siemens LG
Beta 0.61 1 1 1.39 1.38 1.45 1.67 0.1

Mean 1.075
If we compute the arithmetic mean of these Betas we get a value slightly more than 1. Therefore an IBM asset has less systematic risk than the overall market.
In the normal course of business, the financial position of IBM is routinely subject to a variety of risks. In addition to the market risk associated with interest rate and currency movements on outstanding debt and non-U.S. dollar denominated assets and liabilities, other examples of risk include collectibility of accounts receivable and recoverability of residual values on leased assets. The company regularly assesses these risks and has established policies and business practices to protect against the adverse effects of these and other potential exposures. As a result, the company does not anticipate any material losses from these risks. The company’s debt contains an element of market risk from changes in interest and currency rates. The company manages this risk, in part, through the use of a variety of financial instruments including derivatives. To meet disclosure requirements, the company performs a sensitivity analysis to determine the effects that market risk exposures may have on the fair values of the company’s debt and other financial instruments. The financial instruments that are

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