The file Dell data.xlsx (available on the companion website) contains monthly returns for the Standard & Poor's
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The file Dell data.xlsx (available on the companion website) contains monthly returns for the Standard & Poor's stock index and for Dell stock. The beta of a stock is defined as the slope of the least-squares line used to predict the monthly return for a stock from the monthly return for the market. Use this file to perform the following exercises:
a. Estimate the beta of Dell.
b. Interpret the meaning of Dell's beta.
c. If you believe a recession is coming, would you rather invest in a high- beta or low-beta stock?
d. During a month in which the market goes up 5 percent, you are 95 percent sure that Dell's stock price will increase between which range of values?
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Related Book For
Marketing Analytics: Data-Driven Techniques With Microsoft Excel
ISBN: 216520
1st Edition
Authors: Wayne L Winston
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