Given the data in the file Stock Beta.xlsx, estimate the beta (and alpha) for Microsoft (MSFT). Do
Question:
Given the data in the file Stock Beta.xlsx, estimate the beta (and alpha) for Microsoft (MSFT). Do this for each criterion and each period of time to obtain a table analogous to that in the top right of Figure 7.49. What do you conclude about Microsoft?
Figure 7.49:
Transcribed Image Text:
The Beta Estimation Model (for McDonald's) K н 1 Model for estimating company betas Possible objectives 3-year Betas for various objectives for McDonald's 2 3 Parameters All data 3-year All data 4 Alpha 5 Beta 0.5023 0.0062 SE 0.0350 0.2010 SSE 0.3112 WSSE SAE MaxAE 0.3112 0.0318 0.1426 WSSE 0.3197 0.4737 0.4713 0.5203 0.7626 0.8906 3.9385 SAE 7 Weighting constant МахАЕ 0.3475 0.995 0.0640 0.1091 8. SqError 0.00029 Weight Mkt return AbsError Range names used: Alpha Beta Date Stock return -0.0088 Predicted Error =Model!$B$4 |=Model!$B$5 =Model!$E$7 |=Model!$F$7 =Model!$E$6 =Model!$F$6 |=Model!$E$4 =Modell$F$4 |=Model!$E$5 0.0083 0.0149 0.0200 0.0154 -0.0036 10 Dec-2013 11 Nov-2013 12 Oct-2013 13 Sep-2013 14 Aug-2013 15 Jul-2013 16 Jun-2013 17 May-2013 18 Apr-2013 0.0069 -0.0171 0.0171 0.9950 0.0024 0.0280 0.0172 0.00001 0.0024 |МaхАЕ_3 |МaхАЕ_All -0.0169 0.0042 -0.0266 -0.0309 0.0446 0.0031 0.00029 0.0169 0.9900 0.0042 0.0297 0.0197 0.00002 0.9851 0.00071 -0.0313 SAE_3 SAE_All -0.0302 0.0266 0.9801 0.0215 0.9752 -0.0093 0.00095 0.0309 0.0495 0.0015 0.0126 0.0118 0.0174 0.0009 0.0011 0.0100 SSE 3 |SSE_All WSSE 3 0.00056 -0.0150 0.0252 0.0237 0.0237 0.9704 -0.0597 0.0128 0.0222 -0.0480 0.9655 0.0208 -0.0470 0.00356 0.0597 0.0181 0.0246 0.00016 0.0128 0.9607 19 Mar-2013 126 Apr-2004 127 Mar-2004 128 Feb-2004 129 Jan-2004 0.0222 0.9559 0.5591 0.5563 0.0395 0.0360 0.00049 0.0023 -0.0168 -0.0471 0.0480 0.0087 0.0087 0.0895 -0.0164 0.0098 0.0001 0.0895 0.0122 0.0995 0.0080 0.5535 0.5507 -0.0379 0.0011 -0.0390 0.0015 0.0390 -0.0163
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 71% (7 reviews)
Data Monthly closing prices from Jan 2004 to Dec 2013 Month SP 500 AA AAPL AXP BA CAT CSCO CVX DD DIS FDX GE GT HPQ IBM IP JNJ JPM KO MCD MMM MO MRK MSFT PG T UTX WMT Dec2013 181832 994 54902 8757 136...View the full answer
Answered By
Susan Juma
I'm available and reachable 24/7. I have high experience in helping students with their assignments, proposals, and dissertations. Most importantly, I'm a professional accountant and I can handle all kinds of accounting and finance problems.
4.40+
15+ Reviews
45+ Question Solved
Related Book For
Practical Management Science
ISBN: 978-1305250901
5th edition
Authors: Wayne L. Winston, Christian Albright
Question Posted:
Students also viewed these Business questions
-
Solve the previous problem, but analyze GE instead of Microsoft. Data from Previous Problem: Given the data in the file Stock Beta.xlsx, estimate the beta (and alpha) for Microsoft (MSFT). Do this...
-
The demand for chicken in the United States, 19601982. To study the per capita consumption of chicken in the United States, you are given the data in the following table, where Y = per capita...
-
Beta is a common measure of stock-market risk or volatility. It is typically estimated as the slope coefficient for a simple regression model in which stock returns over time are the dependent Y...
-
Find the lengths of the curves. The cardioid r = 1 + cos
-
Two starships, the Enterprise and the Constitution, are approaching each other head-on from a great distance. The separation between them is decreasing at a rate of 782.5 km/s. The Enterprise sends a...
-
State whether each statement is true or false. If false, give the reason. Amazon {rivers in the United States}
-
How does activity-based costing (ABC) differ from the traditional approach? What is the underlying difference in the philosophy of each of them?
-
Wang Company deposits all receipts and makes all payments by check. The following information is available from the cash records. Instructions (a) Prepare a bank reconciliation going from balance per...
-
Kim is watching a fireworks display from an observation spot 5 miles away. Find the angle of elevation from Kim to the fireworks, which are at a height of 0.5 miles. Answer 2 Points Enter your answer...
-
Present Value The present value of A dollars to be paid t years in the future (assuming a 5% continuous interest rate) is P(A, t) = Ae-0.051. Find and interpret P(100, 13.8).
-
Suppose Ford currently sells 250,000 Ford Mustangs annually. The unit cost of a Mustang, including the delivery cost to a dealer, is $16,000. The current Mustang price is $20,000, and the current...
-
In many cases, the portfolio return is at least approximately normally distributed. Then Excels NORMDIST function can be used to calculate the probability that the portfolio return is negative. The...
-
Describe how seasonal relatives are determined using the centred moving average method.
-
2 Points Question 25 The results from 9 statistics students for their overall grade are given below. Find the mean of the data. 73 61 70 99 73 87 92 82 94
-
In regards to short selling: Explain why it is an important function of markets and give reasons. Would you be more inclined to short selling after taking this class? Why or why not?
-
9. Word of mouth advertising can be an effective form of marketing, or it can be very harmful. Consider a new restaurant that serves 27 customers on its opening night. a. Of the 27 customers, 25...
-
Need your kind assistance to provide me with HTML, CSS, and JS code for the blog design below. I want the code to be similar to per design below. When the user hovers over the blog pic, there will be...
-
How your change plan regarding the decrease of greenhouse gas emissions supports the organizational mission/goal (Nucor steel) for genuinely addressing stakeholder concerns, and will serve as an...
-
Will each of the following events increase or decrease cash conversion cycle s? a. Higher financing rates induce the firm to reduce its level of inventory. b. The firm obtains a new line of credit...
-
a. What is the cost of borrowing if Amarjit borrows $28 500 and repays it over a four-year period? b. How many shares of each stock would he get if he used the $28 500 and invested equally in all...
-
Brian Brown, an executive at a manufacturing enterprise, comes to you on December 1 of the current year for tax advice. He has agreed to donate a small tract of land to the Rosepark Community...
-
For several years, you have prepared the tax return for Alpha Corporation, a closely held corporation engaged in manufacturing garden tools. On February 20 of the current year, Bill Johnson, the...
-
Mark Hancock is a self-employed attorney who operates his law practice as an unincorporated sole proprietorship. In 2016, the IRS disallowed several business deductions he took in 2014 and 2015. In...
-
Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: Life of Investment Present Value...
-
a. Assuming that the desired rate of return is 15%, determine the net present value for the proposal. Use the table of the present value of $1 presented above. If required, round to the nearest...
-
Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 108,000 units per year is: Direct materials Direct...
Study smarter with the SolutionInn App