Question
Using AT LEAST three years worth of data, import their stock closing prices into Excel. Also import the closing prices of something that represents 'the
Using AT LEAST three years worth of data, import their stock closing prices into Excel. Also import the closing prices of something that represents 'the market' (This should probably be something that represents the performance of the NASDAQ or NYSE, depending on which market your stock trades in)along with a proxy for the risk free .
Calculate the monthly return for both the stock and the market.
Create an XY scatter plot with the market risk premium on the horizontal axis, and the stock risk premium on the vertical axis.
Fit a linear trendline to the data, and display the equation for that trendline
Once you've created the chart, please answer the following questions:
- From your graph, determine what the beta is for your stock.
- How does your calculation compare to the published beta?
- Why is your beta similar to, or different from, the published values?
- What is the y-intercept on your chart?
- What does this value represent, and what does it mean to us?
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