a. Estimate Beta using a simple regression. Regression analysis can be done in excel: the Yvariable is the column range for the stock returns and X-variable is the column range for the market returns (S&P 500). Beta is the coefficient of the X-variable.
b. Compare the value obtained with the value of Beta for Facebook reported in Yahoo Finance. Discuss the meaning of this number.
E4 X V =(C4-C3)/C3 A B C D E Returns Returns 2 Date FB S&P 500 3 01-12-2015 104.66 2043.93994 FB S&p500 4 01-01-2016 112.21 1940.23999 7.21% -5.07% 5 01-02-2016 106.92 1932.22998 -4.71% -0.41% 6 01-03-2016 114.1 2059.73999 6.72% 6.60% 01-04-2016 117.58 2065.30005 3.05% 0.27% 8 01-05-2016 118.81 2096.94995 1.05% 1.53% 9 01-06-2016 114.28 2098.86011 -3.81% 0.09% 10 01-07-2016 123.94 2173.6001 8.45% 3.56% 11 01-08-2016 126.12 2170.94995 1.76% -0.12% 12 01-09-2016 128.27 2168.27002 1.70% -0.12% 13 01-10-2016 130.99 2126.1499 2.12% -1.94% 14 01-11-2016 118.42 2198.81006 -9.60% 3.42% 15 01-12-2016 115.05 2238.83008 -2.85% 1.82% 16 01-01-2017 130.32 2278.87012 13.27% 1.79% 17 01-02-2017 135.54 2363.63989 4.01% 3.72% 18 01-03-2017 142.05 2362.71997 4.80% -0.04% 19 01-04-2017 150.25 2384.19995 5.77% 0.91% 20 01-05-2017 151.46 2411.80005 0.81% 1.16% 21 01-06-2017 150.98 2423.40991 -0.32% 0.48% 22 01-07-2017 169.25 2470.30005 12.10% 1.93% 23 01-08-2017 171.97 2471.6499 1.61% 0.05% 24 01-09-2017 170.87 2519.36011 -0.64% 1.93% 25 01-10-2017 180.06 2575.26001 5.38% 2.22% 26 01-11-2017 177.18 2584.84009 -1.60% 0.37% 27 01-12-2017 176.46 2673.61011 -0.41% 3.43% 28 01-01-2018 186.89 2823.81006 5.91% 5.62% 29 01-02-2018 178.32 2713.83008 -4.59% -3.89% 30 01-03-2018 159.79 2640.87012 -10.39% -2.69% 31 01-04-2018 172 2648.05005 7.64% 0.27% 32 01-05-2018 191.78 2705.27002 11.50% 2.16% 33 01-06-2018 194.32 2718.37012 1.32% 0.48% 34 01-07-2018 172.58 2816.29004 -11.19% 3.60%34 01-07-2018 172.58 2816.29004 -11.19% 3.60% 35 01-08-2018 175.73 2901.52002 1.83% 3.03% 36 01-09-2018 164.46 2913.97998 -6.41% 0.43% 37 01-10-2018 151.79 2711.73999 -7.70% -6.94% 38 01-11-2018 140.61 2760.16992 -7.37% 1.79% 39 01-12-2018 131.09 2506.8501 -6.77% -9.18% 40 01-01-2019 166.69 2704.1001 27.16% 7.87% 41 01-02-2019 161.45 2784.48999 -3.14% 2.97% 42 01-03-2019 166.69 2834.3999 3.25% 1.79% 43 01-04-2019 193.4 2945.83008 16.02% 3.93% 44 01-05-2019 177.47 2752.06006 -8.24% -6.58% 45 01-06-2019 193 2941.76001 8.75% 6.89% 46 01-07-2019 194.23 2980.37988 0.64% 1.31% 47 01-08-2019 185.67 2926.45996 -4.41% -1.81% 48 01-09-2019 178.08 2976.73999 -4.09% 1.72% 49 01-10-2019 191.65 3037.56006 7.62% 2.04% 50 01-11-2019 201.64 3140.97998 5.21% 3.40% 51 01-12-2019 205.25 3230.78003 1.79% 2.86% 52 01-01-2020 201.91 3225.52002 -1.63% -0.16% 53 01-02-2020 192.47 2954.21997 -4.68% -8.41% 54 01-03-2020 166.8 2584.59009 -13.34% -12.51% 55 01-04-2020 204.71 2912.42993 22.73% 12.68% 56 01-05-2020 225.09 3044.31006 9.96% 4.53% 57 01-06-2020 227.07 3100.29004 0.88% 1.84% 58 01-07-2020 253.67 3271.12012 11.71% 5.51% 59 01-08-2020 293.2 3500.31006 15.58% 7.01% 60 01-09-2020 261.9 3363 -10.68% -3.92% 61 01-10-2020 263.11 3269.95996 0.46% -2.77% 62 01-11-2020 276.48 3572.65991 5.08% 9.26% 63 11-11-2020 276.48 3572.65991 0.00% 0.00%
