As mentioned, spreadsheets can do the work for us of computing beta. Use Excels slope function to
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As mentioned, spreadsheets can do the work for us of computing beta. Use Excel’s “slope” function to estimate the beta of Microsoft using the data in Table LE12.1. Use the “intercept” function to estimate the alpha or intercept term of the regression line.
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Rates of Product Market's Return of the S&P 500 Microsoft Returns Returns Squared X Month Х-Ахis Y-Axis -2.00% -1.70% 2.89% 3.40% -1.70 4.8 2.89 -8.16 -1.60 -6.00 2.56 9.6 1.2 -4.10 1.44 -4.92 1.7 2.89 1.7 6. 5.1 6.5 26.01 33.15 Sum X = 38.68% Sum X = 3.00% Sum Y = 0.20% Sum XY = 34.77% Estimating beta where n = 6 is the number of observations: ηΣxy- (Σχ) (Σy) ηΣx- (Σ)? 6(34.77) -(3.00)(0.20) 208.02 0.93 %3D 6(38.68) – (3.0)(3.0) 223.08 4)
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Related Book For
Introduction to Finance Markets, Investments and Financial Management
ISBN: 978-1119398288
16th edition
Authors: Ronald W. Melicher, Edgar A. Norton
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