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The file De] 1 data .x] sx (available on the companion website) contains monthly returns for the Standard St Poor's stock index and for Dell
The file De] 1 data .x] sx (available on the companion website) contains monthly returns for the Standard St Poor's stock index and for Dell stock. The beta of a stock is dened as the slope of the least-squares line used to predict the monthly return for a stock from the monthly return for the market. Use this le to perform the following exercises: Estimate the beta of Dell. Interpret the meaning of Dell's beta. If you believe a recession is coming1 would you rather invest in a high- beta or low-beta stock? During a month in which the market goes up 5 percent, you are 95 percent sure that Dell's stock price will increase between which range of values
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