Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following table shows rates of return for a mutual fund and the market portfolio (S&P 500). A B C 1 Year Fund Market 2
The following table shows rates of return for a mutual fund and the market portfolio (S&P 500).
A | B | C | |
1 | Year | Fund | Market |
2 | 1 | 14% | 13% |
3 | 2 | -28% | -14% |
4 | 3 | -6% | -3% |
5 | 4 | 5% | 28% |
6 | 5 | 14% | 8% |
7 | 6 | 7% | 4% |
Part 1
Regress the returns on the stock on the returns on the S&P 500. What is the beta of the fund, using the industry model (not subtracting the risk-free rate), i.e., the slope coefficient of the regression?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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