I sent this question yesterday and did not receive an answer. Am submitting again:

I need help with the following study note

Calculate the return on the ENI share and on the Italian index over 13 months until 1 Jan 2011. To help you, you have a record of the share price and of the

general index. HERE IS THE TABLE

PERIOD JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN

10 10 10 10 10 10 10 10 10 10 10 10 11

ENI 16.93 16.57 17.37 16.86 15.2 15.19 15.69 15.67 15.83 16.19 15.50 16.34 17.30

Italian index 21896 21068 22847 21562 19544 19311 21021 19734 20505 21450 19105 20173 22050

The questions are:

What is the total risk of the ENI share?

What is the beta coefficient of ENI?

What portion of the total risk of the ENI share is explained by market risk?

My notes provide the following correct answers, but I don't understand how these answers were reached. Can you please provide a step-by-step explanation on how these answers were reached.

ANSWERS ARE:

Return on the ENI share: 17.30/16.93 - 1 + 2.2%

Returns on the Italian index: 22050/21896 = 0.7%

ENI risk o' = 4.59%

Index risk o' = 7.35%

beta = 0.56; 89,6% = (0.56 X 7.35)/4.59%

I don't understand of this. Can you please help explain how these answers were reached.