Question
Using the CAPM, calculate the 2016 expected return on Facebooks shares. Assumptions: Risk-free rate, Rf = 2.5% E(Rm) = 7.5% Use the SP500 index to
Using the CAPM, calculate the 2016 expected return on Facebooks shares.
Assumptions:
Risk-free rate, Rf = 2.5%
E(Rm) = 7.5%
Use the SP500 index to proxy for the market portfolio.
Hints to calculate beta:
- Use daily stock returns during 2016 (start date 01-Jan-2016, end date 31-Dec-2016).
- Download stock prices for Facebook and the SP500 with ticker name FB and ^GSPC, respectively, from www.finance.yahoo.com.
- Use adjusted prices to calculate returns.
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Options Trading Option Trading Strategies For Beginners
Authors: Alan Richards
1st Edition
153274479X, 978-1532744792
