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Below are the total returns for the market and two companies that comprise the entire industry. Year -4 -3 -2 -1 0 Weight Company A
Below are the total returns for the market and two companies that comprise the entire industry.
Year | -4 | -3 | -2 | -1 | 0 | Weight |
Company A (%) | 23 | 25 | 30 | 20 | 45 | 0.40 |
Company B (%) | 13 | 35 | 40 | 15 | 40 | 0.60 |
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Market (%) | -20 | 30 | 30 | 15 | 30 |
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a. Use the Market Model to estimate the industry beta. Give the equation of the regression line. Briefly explain. (
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