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Consider the returns for Firm A and the market's return under the following economic conditions: FIRMA Market 10% 20% -29 Depression Recession Normal Boom 8%
Consider the returns for Firm A and the market's return under the following economic conditions: FIRMA Market 10% 20% -29 Depression Recession Normal Boom 8% 3% 12% 5% i. What is the expected return for Firm A and the market? (4 marks) ii. Calculate the covariance between the returns of Firm A and the market's return. (6 marks) iii. Calculate the variance of the market's return. (4 marks) iv. What will be the estimated beta for this firm
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