Imagine you wish to estimate the betas for two investments, A and B. You have gathered the following return data, for the market and for each of the investments over the past 10 years, 20082017.

Historical Returns Investment Year Market A B 2008 6.7% 10.2% 16.7% 2009 1.1% 7.3% 10.5% 2010 -13.2% -3.1% 10.9% 2011 -4.2% 3.5% 2.2% 2012 -8.6% -0.6% 3.9% 2013 16.7% 18.3% 30.8% 2014 9.5% 13.7% 22.9% 2015 14.8% 17.5% 28.3% 2016 7.1% 11.5% 19.6% 2017 13.7% 17.1% 26.9%

Part A)

What is the equation of the line for asset A? yA=_____^xxMarket^+ _____ (fill in blanks).

What is the equation of the line for asset B? yB=_____^xxMarket^+ _____ (fill in blanks).

Part B)

Use the characteristic lines from part a to estimate the betas for investments A and B.

Beta A?

Beta B?