Question
Numbers from yahoo finance please answer in excel 3. Use the market model to estimate the beta for Colgate-Palmolive using the last 36 months of
Numbers from yahoo finance please answer in excel
3. Use the market model to estimate the beta for Colgate-Palmolive using the last 36 months of returns (the regression procedure in Excel
is one easy way to do this). Plot the monthly returns on Colgate-Palmolive against the index and also show the fitted line.
4. When the beta of a stock is calculated using monthly returns, there is a debate over the number of months that should be used in the
20
calculation. Rework the previous questions using the last 60 months of of returns. How does this answer compare to what you calculated
previously? What are some arguments for and against using shorter versus longer periods? Also, you've used monthly data, which isa
common choice. You could have used daily, weekly, quarterly, or even annual data. What do you think are the issues here?
5 Compare your beta for Colgate-Palmolive to the beta you find on finance.vahoo.com. How similar are they? Why might t they be
different?
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