Question

You are an analyst for Northington Berlin (NBI). You have gathered the returns for the stock and the S&P 500 and need to calculate beta to complete your analysis. Given the returns below, the beta of NBI is closest to:

	NBI	S&P
2013	12.80%	8.25%
2014	18.20%	6.45%
2015	-12.50%	-4.50%
2016	10.25%	4.38%
2017	3.75%	8.55%

Answer 1

Given stock returns and index returns, Beta of a stock can be found out using slope function in the excel

SLOPE(known_y's, known_x's)

The SLOPE function syntax has the following arguments:

• Known_y's    Required. An array or cell range of numeric dependent data points. (Dependent = Stock return)

• Known_x's    Required. The set of independent data points. (independent = Index Returns)

Beta = 1.79

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