Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Return data for mutual fund XYZ, the S&P 500, and 90-day T-Bills can be found below: Year Fund XYZ S&P 500 90d T-Bills 2000 -19.40%
Return data for mutual fund XYZ, the S&P 500, and 90-day T-Bills can be found below:
| Year | Fund XYZ | S&P 500 | 90d T-Bills |
| 2000 | -19.40% | -13.40% | 1.10% |
| 2001 | 39.70% | 29.70% | 1.30% |
| 2002 | 17.00% | 17.00% | 1.50% |
| 2003 | 29.60% | 21.60% | 1.90% |
| 2004 | -10.40% | -4.40% | 2.00% |
| 2005 | 23.10% | 22.10% | 1.60% |
| 2006 | 24.00% | 18.00% | 1.90% |
| 2007 | -1.20% | 0.80% | 1.20% |
| 2008 | -26.80% | -17.80% | 1.60% |
| 2009 | -3.00% | -5.00% | 1.00% |
| 2010 | -24.00% | -17.00% | 1.10% |
| 2011 | 32.70% | 22.70% | 1.10% |
| 2012 | -29.20% | -21.20% | 1.20% |
| 2013 | -10.60% | -3.60% | 1.70% |
| 2014 | -23.10% | -20.10% | 1.50% |
| 2015 | 16.10% | 11.10% | 1.00% |
| 2016 | 7.80% | 12.80% | 1.90% |
| 2017 | 23.60% | 15.60% | 1.20% |
| 2018 | 37.80% | 27.80% | 1.30% |
| 2019 | 9.60% | 13.60% | 1.70% |
| Total Return (p.a) | 3.20% | 4.14% | 1.44% |
a) Plot the risk premium of Fund XYZ vs. the market premium (10 pts)
b) What is Fund XYZs beta? Hint: use the slope function in Excel. (5 pts)
c) What is Fund XYZs alpha? Hint: use the intercept function in Excel. (5 pts)
Please include the formulas on how to calculate the risk premium and market premium. Please also include instructions on how to plot.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started