Question

company 1 company 2 company 3 company 4 market 1/1/2020 10% 10% 10% 10% 10% 12/1/2019...

company 1

company 2

company 3

company 4

market

1/1/2020

10%

10%

10%

10%

10%

12/1/2019

20%

40%

10%

40%

20%

11/1/2019

30%

30%

50%

30%

30%

10/1/2019

30%

50%

30%

20%

40%

9/1/2019

40%

40%

20%

10%

50%

a, What is the beta of the company 3? (hint: check slope)

  1. 0.3
  2. 0.4
  3. 0.5
  4. 0.6

b, Among company 1, 2, and 3, which one is the most risky one, based on beta?

  1. Company 1
  2. Company 2
  3. Company 3
  4. All equal

Homework Answers

Answer #1

beta is the slope of the security market line.

Beta is calculated using SLOPE function in Excel. Here, the "x"s are each company's returns (dependent variable) and the "y"s are the market returns (independent variable).

a]

beta of company 3 is 0.4

b]

Company 1 and 2 are the most risky, as they have the highest beta

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
company 1 company 2 company 3 company 4 market 1/1/2020 10% 10% 10% 10% 10% 12/1/2019...
company 1 company 2 company 3 company 4 market 1/1/2020 10% 10% 10% 10% 10% 12/1/2019 20% 40% 10% 40% 20% 11/1/2019 30% 30% 50% 30% 30% 10/1/2019 30% 50% 30% 20% 40% 9/1/2019 40% 40% 20% 10% 50% Refer to the above table to answer part a-d. a, How much is company 1’s average return in the past five months? 26% 27% 28% 29% b, How much is company 1’s risk level in the past five months (standard deviation)...
Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products...
Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products in China on July 18 (7/18), February 12 (2/12), and October 7 (10/7), respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return. (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required....
Utilities Energy 9/1/2019 3.33% -1.70% 10/3/2019 1.26% -3.21% 11/4/2019 4.90% 1.73% 12/6/2019 -5.42% 8.47% 1/7/2020 0.90%...
Utilities Energy 9/1/2019 3.33% -1.70% 10/3/2019 1.26% -3.21% 11/4/2019 4.90% 1.73% 12/6/2019 -5.42% 8.47% 1/7/2020 0.90% -2.82% 2/8/2020 1.19% 3.69% Average 1.027% 1.027% Variance 0.0012393 0.0020634 St. Dev. 3.52% 4.54% Based on the table above, if you had invested $10,000 into each sector ETF (Utilities and Energy), what would be the cumulated value of your investment at the end of this time period?
1. Determine whether the distribution represents a probability distribution. X 3 7 9 12 14 P(X)...
1. Determine whether the distribution represents a probability distribution. X 3 7 9 12 14 P(X) 4/13 1/13 3/13 1/13 2/13 2. Determine whether the distribution represents a probability distribution. X 5 7 9 P(X) 0.6 0.8 -0.4 3. Determine whether the distribution represents a probability distribution. X 20 30 40 50 P(X) 0.05 0.35 0.4 0.2
Beta    IRR Project 1        0.3      3% Project 2        0.6      7% Project 3   &nb
Beta    IRR Project 1        0.3      3% Project 2        0.6      7% Project 3        0.8      11% The expected return on the market is 10%. The risk-free rate is 2%. The weighted average cost of capital is 8% for all 3 projects. Which project will be incorrectly rejected?
The following are quality control data for a manufacturing process at Kensport Chemical Company. The data...
The following are quality control data for a manufacturing process at Kensport Chemical Company. The data show the temperature in degrees centigrade at five points in time during a manufacturing cycle. Sample x R 1 95.72 1.0 2 95.24 0.9 3 95.18 0.7 4 95.42 0.4 5 95.46 0.5 6 95.32 1.1 7 95.40 1.0 8 95.44 0.3 9 95.08 0.2 10 95.50 0.6 11 95.80 0.6 12 95.22 0.2 13 95.54 1.3 14 95.22 0.5 15 95.04 0.8 16...
Bramble Corporation began operations on December 1, 2019. The only inventory transaction in 2019 was the...
Bramble Corporation began operations on December 1, 2019. The only inventory transaction in 2019 was the purchase of inventory on December 10, 2019, at a cost of $24 per unit. None of this inventory was sold in 2019. Relevant information is as follows. Ending inventory units    December 31, 2019 175    December 31, 2020, by purchase date       December 2, 2020 175       July 20, 2020 50 225 During the year 2020, the following purchases and sales were made. Purchases Sales March 15...
The following are quality control data for a manufacturing process at Kensport Chemical Company. The data...
The following are quality control data for a manufacturing process at Kensport Chemical Company. The data show the temperature in degrees centigrade at five points in time during a manufacturing cycle. Sample x R 1 95.72 1.0 2 95.24 0.9 3 95.18 0.7 4 95.46 0.4 5 95.46 0.5 6 95.32 1.1 7 95.40 1.0 8 95.44 0.3 9 95.08 0.2 10 95.50 0.6 11 95.80 0.6 12 95.22 0.2 13 95.60 1.3 14 95.22 0.5 15 95.04 0.8 16...
1- For a sample of size 4, if 12 3 xx xx xx − =10, 8,...
1- For a sample of size 4, if 12 3 xx xx xx − =10, 8, and 6, − = − − = − then the sample variance is equal to __________. 2- The __________ of an experiment is the set of all possible outcomes of that experiment. 3- Let A = {1,2,3,4} and B = {3,4,5,6,}, then A B ∪ ={__________} Section 2.2 10. If A and B are mutually exclusive events, then the probability of both events occurring...
Alpha Corporation began operations on December 1, 2019. The only inventory transaction in 2019 was the purchase of inventory on December 10, 2019, at a cost of $20 per unit
Alpha Corporation began operations on December 1, 2019. The only inventory transaction in 2019 was the purchase of inventory on December 10, 2019, at a cost of $20 per unit. None of this inventory was sold in 2019. Relevant information for fiscal 2020 is as follows:Ending inventory units:TotalDecember 31, 2019100December 31, 2020 by purchase dateDecember 2, 2020100July 20, 202030130During 2020, the following purchases and sales were made:PurchasesSalesMarch 15300 units @ $24 per unitApril 10200July 20300 units @ $25 per unitAugust...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT