Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hello please answer the below questions using the info from above. magine you wish to estimate the betas for two investments, A and B. You

image text in transcribedimage text in transcribed

Hello please answer the below questions using the info from above.

image text in transcribed

magine you wish to estimate the betas for two investments, A and B. You have gathered the following return data, EEB, for the market and for each of the investments over the past 10 years, 2008-2017 a. On a set of market return (x-axis)-investment return (y-axis) axes, use the data to draw the characteristic lines for investments A and B on the same set of axes. b. Use the characteristic lines from part a to estimate the betas for investments A and B. a. The equation of the line for asset A is yXMarket. (Round to two decimal places) Investment Market Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 16.2% 10.5% 9.9% 3.4% 2.1% 30.2% 22.9% 28.5% 18.1% 25.9% 10.9% 5.5% 1.2% -13.6% -4.3% -13% 15.4% 10.6% 15.6% 8.5% 13.7% -4.4% 3.3% 19.8% 14.7% 18.8% 1 1.3% 16.4% a. The equation of the line for asset A is yA.9 X6.04. (Round to two decimal places.) The equation of the line for asset B is y0.93 XXMarket+12.88. (Round to two decimal places.) b. The beta of asset A is 0.79. (Round to two decimal places.) The beta of asset B is 0.93. (Round to two decimal places.) magine you wish to estimate the betas for two investments, A and B. You have gathered the following return data, EEB, for the market and for each of the investments over the past 10 years, 2008-2017 a. On a set of market return (x-axis)-investment return (y-axis) axes, use the data to draw the characteristic lines for investments A and B on the same set of axes. b. Use the characteristic lines from part a to estimate the betas for investments A and B. a. The equation of the line for asset A is yXMarket. (Round to two decimal places) Investment Market Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 16.2% 10.5% 9.9% 3.4% 2.1% 30.2% 22.9% 28.5% 18.1% 25.9% 10.9% 5.5% 1.2% -13.6% -4.3% -13% 15.4% 10.6% 15.6% 8.5% 13.7% -4.4% 3.3% 19.8% 14.7% 18.8% 1 1.3% 16.4% a. The equation of the line for asset A is yA.9 X6.04. (Round to two decimal places.) The equation of the line for asset B is y0.93 XXMarket+12.88. (Round to two decimal places.) b. The beta of asset A is 0.79. (Round to two decimal places.) The beta of asset B is 0.93. (Round to two decimal places.)

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 Intelligence

Authors: Income Mastery

1st Edition

1647773210, 978-1647773212

More Books

Students also viewed these Finance questions