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 framework.

L M N O Monthly Returns OWN The CAPM Method for the expected return 6 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. 13 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 framework. 888888888888888888888 3 Date Market Retur Google Reter Risk-Free Rate 2E+07 -0.026557 0.014679 0.0016 2E+07 0.022695 -0.039004 0.0016 2E+07 -0.01694 -0.039789 0.0021 7 25-07 -0.025182 0.218769 0.0021 2E+07 0.037916 0.260318 0.0024 2E+07 0.011532 0.060879 0.0023 10 2E+07 0.043332 -0.021724 0.0024 112 .07 -0.005942 -0.006116 0.003 2E.07 0.010581 0.106503 0.0029 2E+07 -0.020786 0.175946 0.0027 14 2E+07 0.040407 0.088065 0.0031 2E+07 0.003477 0.024567 0.0032 2E.07 0.040113 0.042906 0.0035 17 2E+07 -0.001644 -0.161883 0.0034 18 2E+07 0.019058 0.075506 0.0037 19 25-07 0.012969 0.071641 0.0036 20 2E+07 -0.031042 -0.110351 0.0043 21 2E+07 -0.000395 0.127777 0.004 22 2E+07 -0.001899 -0.078053 0.004 23 2E+07 0.025083 -0.020874 0.0042 24 2E+07 0.013452 0.061739 0.0041 25 2E+07 0.037086 0.185345 0.0041 261 2E+07 0.023717 0.017675 0.0042 27 2E+07 0.010822 -0.050185 0.004 28 2E+07 0.013439 0.083081 0.0044 29 2E+07 -0.013999 -0.103789 0.0038 30 2E+07 0.012947 0.019379 0.0043 31 2E+07 0.039891 0.028855 0.0044 2E+07 0.038898 0.056279 0.0041 33 2E+07 -0.014759 0.04979 0.004 34 2E+07 -0.031753 -0.024297 0.004 35 2E+07 0.011624 0.010294 0.0042 36 2E+07 0.040903 0.100961 0.0032 37 2E+07 0.025839 0.24632 0.0032 38 2E+07 -0.043279 -0.019802 0.0034 39 2E+07 -0.004343 -0.002193 0.0027 40 2E+07 -0.062306 -0.183924 0.0021 41 2E+07 -0.02204 -0.165019 0.0013 42 2E+07 -0.010471 -0.065177 0.0017 43 2E+07 0.051152 0.303812 0.0017 44 2E+07 0.023825 0.020042 0.0017 45 2E+07 -0.078627 -0.101366 0.0017 46 2E+07 -0.013157 -0.100053 0.0015 47 2E+07 0.011044 -0.022079 0.0012 48 2E+07 -0.09806 -0.135488 0.0015 49 2E+07 -0.184721 -0.102766 0.0008 50 2E+07 -0.085201 -0.104773 0.0002 512E+07 0.021471 0.050143 0.0009 52 2E+07 -0.077444 0.100374 53 2E+07 -0.100963 -0.001595 0.0001 54 2.07 0.087698 0.029794 0.0001 55 2E+07 0 110553 0.137649 0.0001 56 2E+07 0.067336 0.053691 57 2E+07 -0.002779 0.01045 59 2E07 0.082454 0.050903 0.0001 59 2E+07 0.031887 0.042027 0.0001 60 2E+07 0.045244 0.074036 61 2E+07 -0.028415 0.081214 62 2E+07 0.057381 0.087443 63 2.07 0.029165 0.06343 0 64 L M N O Monthly Returns OWN The CAPM Method for the expected return 6 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. 13 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 framework. 888888888888888888888 3 Date Market Retur Google Reter Risk-Free Rate 2E+07 -0.026557 0.014679 0.0016 2E+07 0.022695 -0.039004 0.0016 2E+07 -0.01694 -0.039789 0.0021 7 25-07 -0.025182 0.218769 0.0021 2E+07 0.037916 0.260318 0.0024 2E+07 0.011532 0.060879 0.0023 10 2E+07 0.043332 -0.021724 0.0024 112 .07 -0.005942 -0.006116 0.003 2E.07 0.010581 0.106503 0.0029 2E+07 -0.020786 0.175946 0.0027 14 2E+07 0.040407 0.088065 0.0031 2E+07 0.003477 0.024567 0.0032 2E.07 0.040113 0.042906 0.0035 17 2E+07 -0.001644 -0.161883 0.0034 18 2E+07 0.019058 0.075506 0.0037 19 25-07 0.012969 0.071641 0.0036 20 2E+07 -0.031042 -0.110351 0.0043 21 2E+07 -0.000395 0.127777 0.004 22 2E+07 -0.001899 -0.078053 0.004 23 2E+07 0.025083 -0.020874 0.0042 24 2E+07 0.013452 0.061739 0.0041 25 2E+07 0.037086 0.185345 0.0041 261 2E+07 0.023717 0.017675 0.0042 27 2E+07 0.010822 -0.050185 0.004 28 2E+07 0.013439 0.083081 0.0044 29 2E+07 -0.013999 -0.103789 0.0038 30 2E+07 0.012947 0.019379 0.0043 31 2E+07 0.039891 0.028855 0.0044 2E+07 0.038898 0.056279 0.0041 33 2E+07 -0.014759 0.04979 0.004 34 2E+07 -0.031753 -0.024297 0.004 35 2E+07 0.011624 0.010294 0.0042 36 2E+07 0.040903 0.100961 0.0032 37 2E+07 0.025839 0.24632 0.0032 38 2E+07 -0.043279 -0.019802 0.0034 39 2E+07 -0.004343 -0.002193 0.0027 40 2E+07 -0.062306 -0.183924 0.0021 41 2E+07 -0.02204 -0.165019 0.0013 42 2E+07 -0.010471 -0.065177 0.0017 43 2E+07 0.051152 0.303812 0.0017 44 2E+07 0.023825 0.020042 0.0017 45 2E+07 -0.078627 -0.101366 0.0017 46 2E+07 -0.013157 -0.100053 0.0015 47 2E+07 0.011044 -0.022079 0.0012 48 2E+07 -0.09806 -0.135488 0.0015 49 2E+07 -0.184721 -0.102766 0.0008 50 2E+07 -0.085201 -0.104773 0.0002 512E+07 0.021471 0.050143 0.0009 52 2E+07 -0.077444 0.100374 53 2E+07 -0.100963 -0.001595 0.0001 54 2.07 0.087698 0.029794 0.0001 55 2E+07 0 110553 0.137649 0.0001 56 2E+07 0.067336 0.053691 57 2E+07 -0.002779 0.01045 59 2E07 0.082454 0.050903 0.0001 59 2E+07 0.031887 0.042027 0.0001 60 2E+07 0.045244 0.074036 61 2E+07 -0.028415 0.081214 62 2E+07 0.057381 0.087443 63 2.07 0.029165 0.06343 0 64