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c. Construct a scatter diagram graph that shows Goodmans and Landry returns on the vertical axis and the Market Indexs returns on the horizontal axis.
| c. Construct a scatter diagram graph that shows Goodmans and Landry returns on the vertical axis and the Market Indexs returns on the horizontal axis. | |||||
| It is easiest to make scatter diagrams with a data set that has the X-axis variable in the left column, so we reformat the returns data calculated above and show it just below. | |||||
| Year | Index | Goodman | Landry | ||
| 2019 | 32.8% | 24.8% | -1.0% | ||
| 2018 | 1.2% | -4.2% | 13.2% | ||
| 2017 | 34.9% | 62.7% | -10.0% | ||
| 2016 | 14.8% | 2.9% | -40.0% | ||
| 2015 | 19.0% | 60.9% | 11.7% | ||
| d. Estimate Goodmans and Landrys betas as the slopes of regression lines with stock returns on the vertical axis (y-axis) and market return on the horizontal axis (x-axis). (Hint: use Excels SLOPE function.) Are these betas consistent with your graph? | |||||
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| Goodman's beta = | |||||
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| Landry' beta = | |||||
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