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)
- 0.3
- 0.4
- 0.5
- 0.6
b, Among company 1, 2, and 3, which one is the most risky one, based on beta?
- Company 1
- Company 2
- Company 3
- 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
Not the answer you're looking for?
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.
ADVERTISEMENT
Active Questions
asked 5 minutes ago
asked 5 minutes ago
asked 13 minutes ago
asked 22 minutes ago
asked 29 minutes ago
asked 29 minutes ago
asked 32 minutes ago
asked 35 minutes ago
asked 39 minutes ago
asked 50 minutes ago
asked 1 hour ago
asked 1 hour ago