Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me provide excel equation Beta Spreadsheet Example ASSIGNMENT # NAME: LAB TIME: 1. Compute beta coefficients for all three stocks and report the

Please help me provide excel equation
image text in transcribed
image text in transcribed
image text in transcribed
Beta Spreadsheet Example ASSIGNMENT # NAME: LAB TIME: 1. Compute beta coefficients for all three stocks and report the regression summary output below: Stock A: Stock B: Stock C: 2. Calculation of Portfolio Beta and Portfolio Return 3. If the annual risk-free rate, Ref,, will be 4 percent in 2022 and the expected return on the market index, E(Rm), will be 10 percent, what is your portfolio's required rate of return according to the CAPM? E(Rp)=Rrf+p[(E(Rm)Rrd)]=formula 27 Risk and Return Spreadsheet Example ASSIGNMENT # NAME: LAB TIME: Risk and Return Exercises: On January 2, 2022, you plan to invest $1,000,000 in three stocks to form a portfolio: $300,000 in Stock A, $300,000 in Stock B, and $400,000 in Stock C. To better assess your portfolio's expected return and risk, you decide to rely on the historical data of these three stocks, assuming that past performance will be a good predictor for future performance. You have collected the monthly closing prices information for all three stocks and the market index from December 2019 to December 2021. 1. Create the spreadsheet and input the information given below. Next, calculate returns for each stock and the market index. All three stocks never pay dividends. Compute both mean and standard deviation of returns for all three stocks and the market index. 2. Compute beta coefficients for all three stocks and report their respective regression summary output. Next, calculate your portfolio's annual return and beta. 3. If the risk-free rate, Rrf and the expected return on the market index, E(Rm), for 2022 will be 4 percent and 10 percent, respectively, what is your portfolio's required rate of return according to the CAPM

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

Derivative Products And Pricing The Das Swaps And Financial Derivatives Library

Authors: Satyajit Das

1st Edition

0470821647, 9780470821640

More Books

Students also viewed these Finance questions