Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ased on five years of monthly data, you derive the following information for the companies listed: Company a i (Intercept) i r i M Intel

ased on five years of monthly data, you derive the following information for the companies listed:

Company ai (Intercept) i riM
Intel 0.21 14.00 % 0.79
Ford 0.11 14.70 0.25
Anheuser Busch 0.15 8.70 0.51
Merck 0.04 8.50 0.64
S&P 500 0.00 6.00 1.00

  1. Compute the beta coefficient for each stock. Do not round intermediate calculations. Round your answers to three decimal places.

    Intel:

    Ford:

    Anheuser Busch:

    Merck:

  2. Assuming a risk-free rate of 9 percent and an expected return for the market portfolio of 13 percent, compute the expected (required) return for all the stocks. Do not round intermediate calculations. Round your answers to two decimal places.

    Intel: %

    Ford: %

    Anheuser Busch: %

    Merck: %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Reporting And Statement Analysis A Strategic Approach

Authors: Clyde P. Stickney, Paul Brown, James M. Wahlen

5th Edition

032418638X, 978-0324186383

More Books

Students also viewed these Finance questions