Question1:

Assume the market model where you are regressing Ri (dependent variable) over Rm (independent variable).

Use excel spreadsheet to do the computations for following exercise.

Year	Ri	Rm
2010	0.148	0.168
2011	0.045	0.052
2012	0.333	0.351
2013	0.203	0.224
2014	0.288	0.3
2015	0.092	0.105
2016	0.038	0.068
2017	0.131	0.142
2018	0.016	0.028
2019	-0.13	-0.1

Use the Above table to obtain the following:

1. The estimate of aI ( This is b₀ in the class work analysis)
2. The estimate of bI ( This is b₁ in the class work analysis)
3. The estimate of total risk of security i
4. The estimate of systematic risk of security i
5. The estimate of unsystematic risk of security i
6. Estimate the coefficient of determination of im2
7. Test the significance of alpha
8. Test the significance of beta
9. Test the significance of coefficient of correlation.
10. Obtain a 99 % confidence interval on beta.
11. Based on your computations, please write a short report on conclusions that you might draw.
12. Use regression function in Data Analysis (in excel) to confirm the numbers you compute above.