User Account

All Pages

Construct a scatter diagram showing the relationship

Assignment Help Finance Basics
Reference no: EM131100718

You are given the following set of data:
Construct a scatter diagram showing the relationship between returns on Stock Y and the market. Use a spreadsheet or a calculator with a linear regression function to estimate beta.
b. Give a verbal interpretation of what the regression line and the beta coefficient show about Stock Y's volatility and relative riskiness as compared with those of other stocks.
c. Suppose the scatter of points had been more spread out, but the regression line was exactly where your present graph shows it. How would this affect (1) the firm's risk if the stock is held in a one-asset portfolio and (2) the actual risk premium on the stock if the CAPM holds exactly?
d. Suppose the regression line had been downward sloping and the beta coefficient had been negative. What would this imply about (1) Stock Y's relative riskiness, (2) its correlation with the market, and (3) its probable risk premium?

368_hh.jpg

Reference no: EM131100718

Questions Cloud

What is the closest that the comet comes to the sun : What is the closest that the comet comes to the sun? Explain your method.
Question regarding the technique of last resort : Why is simulation often called a technique of last resort? Must you use a computer to get good information from a simulation? Explain.
Based on the symptoms and signs that the child exhibited : She is most concerned because her uncle has been diagnosed with muscular dystrophy (MD) and worries that she may carry the gene - child exhibited what may be the diagnosis?
What price will the profit maximizing monopolist charge : What price will the profit maximizing monopolist charge? What is the value of consumer surplus under monopoly? What is the value of producer surplus under monopoly? What is the value of deadweight loss?
Construct a scatter diagram showing the relationship : You are given the following set of data: Construct a scatter diagram showing the relationship between returns on Stock Y and the market. Use a spreadsheet or a calculator with a linear regression function to estimate beta. b. Give a verbal interpreta..
Use a spreadsheet to determine stock x''s beta coefficient : a. Use a spreadsheet (or a calculator with a linear regression function) to determine Stock X's beta coefficient.b. Determine the arithmetic average rates of return for Stock X and the NYSE over the period given. Calculate the standard deviations of ..
Solve a spreadsheet model for this problem : At a small but growing airport, the local airline company is purchasing a new tractor for a tractor-trailer train to bring luggage to and from the airplanes. A new mechanized luggage system will be installed in 3 years, so the tractor will not be ..
Concept of entrepreneurial motivation : 1. What is the concept of entrepreneurial motivation and how has it been depicted? 2. Explain the concept of entrepreneurial persistence and how it is being examined.
Which security is more risky and why? : Security A has an expected rate of return of 6 percent, a standard deviation of expected returns of 30 percent, a correlation coefficient with the market of - 0.25, and a beta coefficient of 0.5. Security B has an expected return of 11 percent, a st..

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd