Imagine you wish to estimate the betas for 2 investments, A and B. You have gathered the
Question:
a. On a set of market return (x-axis)investment return (y-axis) axes, use the data to draw the characteristic lines for investments A and B on the same graph.
b. Use the characteristic lines from part a to estimate the betas for investments A and B.
c. Use the betas found in part b to comment on the relative risks of investments A and B.
Transcribed Image Text:
Historical Returns Investment(%) Market Year 2005 2006 2007 2008 2009 2010 2011 2012 013 2014 16 10 16 10 15 19 14 30 29 19 26 12 13 17
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a b c Investment Year Market A B 2005 6 11 16 2006 2 8 1...View the full answer
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Related Book For
Fundamentals of Investing
ISBN: 978-0133075359
12th edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
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