The CAPM Method for the expected return I have given you monthly returns for the stock market, Google, and the three-month treasury (risk-free rate). 1) Run the regression to estimate the beta of Google and report the ouput in a new worksheet. 2)Write the security characteristic line equation (SCL) using the regression output. 3) Suppose that the risk free rate is 0.1% and the market risk premium is 0.4%. Using the beta from Question 1), figure out the expected return for Google based on the CAPM A B D E F G Monthly Returns Date Market Retum Google Retum Risk-Free Rate 20050131 -0.026557 0.014679 0.0016 20050228 0.022695 -0.039004 0.0016 20050331 -0.01694 -0.039789 20050429 -0.025182 0.218769 0.0021 0.0021 20050531 0.037916 0.260318 0.0024 20050630 0.011532 0.060879 0.0023 20050729 0.043332 -0.021724 0.0024 20050831 -0.005942 -0.006116 0.003 20050930 0.010581 0.106503 0.0029 20051031 -0.020786 0.175946 0.0027 20051130 0.040407 0.088065 0.0031 20051230 0.003477 0.024567 0.0032 20060131 0.040113 0.042906 0.0035 20060228 -0.001644 -0.161883 0.0034 20060331 0.019058 0.075506 0.0037 20060428 0.012969 0.071641 20060531 -0.031042 -0.110351 20060630 -0.000395 0.127777 20060731 -0.001899 -0.078053 0.0036 0.0043 0.004 0.004 20060831 0.025083 -0.020874 0.0042 20060929 0.019452 0.061739 0.0041 20061031 0.037086 0.185345 0.0041 20061130 0.023717 0.017675 0.0042 20061229 0.010822 -0.050185 0.004 20070131 0.019439 0.089081 0.0044 20070228 -0.013999 -0.103789 0.0038 20070330 0.012947 0.019379 0.0043 20070430 0.039891 0.028855 0.0044 20070531 0.038898 0.056279 0.0041 20070629 -0.014759 0.04979 0.004 20070731 -0.031753 -0.024297 0.004 20070831 0.011624 0.010294 0.0042 20070928 0.040903 0.100961 0.0032 20071031 0.025839 0.24632 0.0032 20071130 -0.049279 -0.019802 0.0034 20071231 -0.004343 -0.002193 0.0027 20080131 -0.062306 -0.183924 0.0021 20080229 -0.02204 -0.165019 0.0013 20080331 -0.010471 -0.065177 0.0017 20080430 0.051152 0.303812 0.0017 20080530 0.023825 0.020042 0.0017 20080630 -0.078627 -0.101366 0.0017 20080731 -0.013157 -0.100053 0.0015 20080829 0.011044 -0.022079 0.0012 20080930 -0.09806 -0.135488 0.0015 20081031 -0.184721 -0.102766 0.0008 20081128 -0.085201 -0.184773 0.0002 20081231 0.021471 0.050143 0.0009 20090130 -0.077444 0.100374 0 20090227 -0.100963 -0.001595 20090331 0.087698 0.029794 0.0001 0.0001 20090430 0.110553 0.137649 0.0001 20090529 0.067336 0.053691 0 20090630 -0.002779 20090731 0.082454 0.01045 0.050903 0 0.0001 20090831 0.031887 0.042027 0.0001 20090930 0.045244 0.074036 0 20091030 -0.028415 0.081214 0 20091130 0.057381 0.087443 0 20091231 0.029165 0.06343 0 H The CAPM Method for the expected return I have given you monthly returns for the stock market, Google, and the three-month treasury (risk-free rate). 1) Run the regression to estimate the beta of Google and report the ouput in a new worksheet. 2)Write the security characteristic line equation (SCL) using the regression output. 3) Suppose that the risk free rate is 0.1% and the market risk premium is 0.4%. Using the beta from Question 1), figure out the expected return for Google based on the CAPM