The following table lists returns on the market portfolio and on Microsoft, each year from 1989 to

Question:

The following table lists returns on the market portfolio and on Microsoft, each year from 1989 to 1998.

Year Microsoft Market Portfolio 1989 80.95% 31.49%

1990 -47.37% -3.17%

1991 31% 30.57%
1992 132.44% 7.58%
1993 32.02% 10.36%
1994 25.37% 2.55%
1995 -28.57% 37.57%
1996 0.00% 22.68%
1997 11.67% 33.10%
1998 36.19% 28.32%

a. Estimate the covariance in returns between Microsoft and the market portfolio

b. Estimate the variances in returns on both investments

c. Estimate the beta for Microsoft

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Applied Corporate Finance

ISBN: 9788126537884

3rd Edition

Authors: Aswath Damodaran

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Question Posted: Jul 31, 2024 07:00 AM

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The following table lists returns on the market portfolio and on Microsoft, each year from 1989 to

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Applied Corporate Finance

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