I only need the answer for Question 7

Use the Excel Template and the table of prices and dividends below to answer the next seven questions:

	Nike, Inc. Ticker = NKE		S&P 500
Month	Price	Dividend	Price
Dec-16	50.65	0.18	2191.08
Nov-16	50.07		2198.81
Oct-16	50.18		2126.15
Sep-16	52.65	0.16	2168.27
Aug-16	57.64		2170.95
Jul-16	55.5		2173.6
Jun-16	55.2	0.16	2098.86
May-16	55.22		2096.95
Apr-16	58.94		2065.3
Mar-16	61.47	0.16	2059.74
Feb-16	61.59		1932.23
Jan-16	62.01		1940.24
Dec-15	62.5	0.16	2043.94
Nov-15	66.14		2080.41
Oct-15	65.515		2079.36
Sep-15	61.485	0.14	1920.03
Aug-15	55.875		1972.18
Jul-15	57.61		2103.84
Jun-15	54.01		2063.11
May-15	50.835	0.14	2107.39
Apr-15	49.42		2085.51
Mar-15	50.165		2067.89
Feb-15	48.56	0.14	2104.5
Jan-15	46.125		1994.99
Dec-14	48.075	0.14	2058.9
Nov-14	49.645		2067.56

NOTE: The most recent price is on the first row of the table.

1. (EXCEL TEMPLATE) Calculate monthly returns for Nike, Inc. (NKE) and the S&P 500. Be sure to include the dividends for Nike in the return.

2. (EXCEL TEMPLATE) Calculate the average, standard deviation, and variance of returns for Nike, Inc. and the S&P 500.

3. (EXCEL TEMPLATE) Use the covariance equation to find the covariance between Nike, Inc. and the S&P 500.

4. (EXCEL TEMPLATE) Use the correlation coefficient equation to find the correlation coefficient between Nike, Inc. and the S&P 500.

5. (EXCEL TEMPLATE) Use the beta equation to find the beta of Nike, Inc.

6. (EXCEL TEMPLATE) Use Regression Analysis to find the beta for Nike, Inc. (you should get the same answer as in question 5).

7. Answer the following concept questions:

a. Go to the website for Yahoo Finance and find the Company Profile for Nike, Inc. What Industry and Sector is listed for Nike, Inc.?

b. Given the industry and sector, does the value of the beta for Nike, Inc. that you calculated seem too high/low? Explain.

c. What is the probability that the true beta for Nike, Inc. is equal to zero?

d. Does the R² for Nike, Inc. seem reasonable? Explain.

e. If the market risk premium is 5% and the risk free rate is 1%, what return would you expect to earn on Nike, Inc.?