Question
Using the data for McDonald's and market risk premium in the attached excel file, run a regression and estimate beta and alpha. Date Mkt_Rf MCD_Rf
Using the data for McDonald's and market risk premium in the attached excel file, run a regression and estimate beta and alpha.
| Date | Mkt_Rf | MCD_Rf |
| 01.07.2017 | 1,87 | 1,857733 |
| 01.08.2017 | 0,16 | 3,023317 |
| 01.09.2017 | 2,51 | -1,56554 |
| 01.10.2017 | 2,25 | 6,439226 |
| 01.11.2017 | 3,12 | 2,951567 |
| 01.12.2017 | 1,06 | 0,593899 |
| 01.01.2018 | 5,58 | -0,67936 |
| 01.02.2018 | -3,65 | -7,93986 |
| 01.03.2018 | -2,35 | -0,355 |
| 01.04.2018 | 0,29 | 6,932535 |
| 01.05.2018 | 2,65 | -4,57745 |
| 01.06.2018 | 0,48 | -2,21484 |
| 01.07.2018 | 3,19 | 1,021146 |
| 01.08.2018 | 3,44 | 2,817009 |
| 01.09.2018 | 0,06 | 3,612764 |
| 01.10.2018 | -7,68 | 5,554534 |
| 01.11.2018 | 1,69 | 6,383003 |
| 01.12.2018 | -9,55 | -5,41247 |
| 01.01.2019 | 8,41 | 0,471407 |
| 01.02.2019 | 3,4 | 2,650295 |
| 01.03.2019 | 1,1 | 3,763995 |
| 01.04.2019 | 3,97 | 3,828978 |
| 01.05.2019 | -6,94 | 0,144299 |
| 01.06.2019 | 6,93 | 5,169336 |
| 01.07.2019 | 1,19 | 1,283535 |
| 01.08.2019 | -2,58 | 3,280596 |
| 01.09.2019 | 1,43 | -1,15475 |
| 01.10.2019 | 2,07 | -8,53806 |
| 01.11.2019 | 3,87 | -1,24863 |
| 01.12.2019 | 2,77 | 2,120616 |
| 01.01.2020 | -0,1 | 8,148921 |
| 01.02.2020 | -8,13 | -9,37363 |
| 01.03.2020 | -13,38 | -14,4298 |
| 01.04.2020 | 13,65 | 13,4321 |
| 01.05.2020 | 5,58 | -0,67112 |
| 01.06.2020 | 2,46 | -0,34279 |
| 01.07.2020 | 5,77 | 5,307933 |
| 01.08.2020 | 7,63 | 9,89321 |
| 01.09.2020 | -3,63 | 3,387409 |
| 01.10.2020 | -2,1 | -2,96686 |
| 01.11.2020 | 12,47 | 2,074518 |
| 01.12.2020 | 4,63 | -0,73877 |
| 01.01.2021 | -0,03 | -3,14102 |
| 01.02.2021 | 2,78 | -0,81793 |
| 01.03.2021 | 3,08 | 9,40093 |
| 01.04.2021 | 4,93 | 5,327031 |
| 01.05.2021 | 0,29 | -0,92765 |
| 01.06.2021 | 2,75 | -0,69446 |
| 01.07.2021 | 1,27 | 5,073815 |
| 01.08.2021 | 2,91 | -2,16308 |
| 01.09.2021 | -4,37 | 2,093756 |
| 01.10.2021 | 6,65 | 1,841491 |
| 01.11.2021 | -1,55 | -0,38689 |
| 01.12.2021 | 3,1 | 10,19285 |
| 01.01.2022 | -6,25 | -3,21557 |
| 01.02.2022 | -2,29 | -5,65813 |
| 01.03.2022 | 3,06 | 1,58745 |
1) What is the McDonald's stock beta? Report up to the second decimal place. Incorrect rounding leads to zero credit. (e.g. 1.234 = 1.23, 1.236 = 1.24)
2) Is the McDonald's stock is more or less sensitive to the overall market?
a)More sensitive than that of overall market
b)Less sensitive than that of overall market
c)Cannot be determined
3)The regression results show that the Y-intercept is 0.42. Do you think that the stock has a meaningful alpha?
a) Yes, because the alpha coefficient is not zero.
b) No. becasue the p-value indicates that the estimate is not statistically significant.
c) We cannot determine from the data.
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Healthcare Financial Management Applied Concepts And Practical Analyses
Authors: Cassandra R. Henson
1st Edition
0826144748, 978-0826144744
