Use data from Market Insight to calculate the beta of Staples, Inc. Start by fi nding the monthly price changes of Staples and the S&P 500 in Monthly Adjusted Prices Report in the Excel Analytics, Market Data section. Copy the data into Excel and confi rm the monthly rates of return (based on closing prices) for each series. Using the entire period for which data are available, estimate a regression with Staples’ return as the dependent (Y)

variable and the S&P 500 return as the independent (X) variable. Now repeat the procedure using only the most recent two years of data. Estimate a third regression using only the earliest two years of data. How stable is the beta estimate? Finally, compare your three results to the beta listed in Staples’ S&P Stock Report (in the S&P Stock Reports section). Do any of your results match the S&P Report’s beta? What factors might explain any differences? LO.1