A B C D E 1 Monthly Returns 2 3 Date Market Return Google Return Risk-Free Rate 4 20050131 -0.026557 0.014679 0.0016 5 20050228 0.022695 -0.039004 0.0016 6 20050331 -0.01694 -0.039789 0.0021 7 20050429 -0.025182 0.218769 0.0021 8 20050531 0.037916 0.260318 0.0024 9 20050630 0.011532 0.060879 0.0023 10 20050729 0.043332 -0.021724 0.0024 11 20050831 -0.005942 -0.006116 0.003 12 20050930 0.010581 0.106503 0.0029 13 20051031 -0.020786 0.175946 0.0027 14 20051130 0.040407 0.088065 0.0031 15 20051230 0.003477 0.024567 0.0032 16 20060131 0.040113 0.042906 0.0035 17 20060228 -0.001644 -0.161883 0.0034 18 20060331 0.019058 0.075506 0.0037 19 20060428 0.012969 0.071641 0.0036 20 20060531 -0.031042 -0.110351 0.0043 21 20060630 -0.000395 0.127777 0.004 22 20060731 -0.001899 -0.078053 0.004 23 20060831 0.025083 -0.020874 0.0042 24 20060929 0.019452 0.061739 0.0041 25 20061031 0.037086 0.185345 0.0041 26 20061130 0.023717 0.017675 0.0042 27 20061229 0.010822 -0.050185 0.004 28 20070131 0.019439 0.089081 0.0044 29 20070228 -0.013999 -0.103789 0.0038 30 20070330 0.012947 0.019379 0.0043 31 20070430 0.039891 0.028855 0.0044 32 20070531 0.038898 0.056279 0.0041 33 20070629 -0.014759 0.04979 0.004 34 20070731 -0.031753 -0.024297 0.004 35 20070831 0.011624 0.010294 0.0042 30 20070330 0.012947 0.019379 0.0043 31 20070430 0.039891 0.028855 0.0044 32 20070531 0.038898 0.056279 0.0041 33 20070629 -0.014759 0.04979 0.004 34 20070731 -0.031753 -0.024297 0.004 35 20070831 0.011624 0.010294 0.0042 36 20070928 0.040903 0.100961 0.0032 37 20071031 0.025839 0.24632 0.0032 38 20071130 -0.049279 -0.019802 0.0034 39 20071231 -0.004343 -0.002193 0.0027 40 20080131 -0.062306 -0.183924 0.0021 41 20080229 -0.02204 -0.165019 0.0013 42 20080331 -0.010471 -0.065177 0.0017 43 20080430 0.051152 0.303812 0.0017 44 20080530 0.023825 0.020042 0.0017 45 20080630 -0.078627 -0.101366 0.0017 46 20080731 -0.013157 -0.100053 0.0015 47 20080829 0.011044 -0.022079 0.0012 48 20080930 -0.09806 -0.135488 0.0015 49 20081031 -0.184721 -0.102766 0.0008 50 20081128 -0.085201 -0.184773 0.0002 51 20081231 0.021471 0.050143 0.0009 52 20090130 -0.077444 0.100374 0 53 20090227 -0.100963 -0.001595 0.0001 54 20090331 0.087698 0.029794 0.0001 55 20090430 0.110553 0.137649 0.0001 56 20090529 0.067336 0.053691 0 57 20090630 -0.002779 0.01045 0 58 20090731 0.082454 0.050903 0.0001 59 20090831 0.031887 0.042027 0.0001 60 20090930 0.045244 0.074036 61 20091030 -0.028415 0.081214 62 20091130 0.057381 0.087443 63 20091231 0.029165 0.06343 oooo 0 0 0 0 64 The CAPM Method for the expected return I have given you monthly returns for the stock market, Google, and the three-month treasury (risk-free rate). 1) Run the regression to estimate the beta of Google and report the ouput in a new worksheet. 2)Write the security characteristic line equation (SCL) using the regression output. 3) Suppose that the risk free rate is 0.1% and the market risk premium is 0.4%. Using the beta from Question 1), figure out the expected return for Google based on the CAPM framework.