Identifies method for calculating beta

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Reference no: EM132053176

1. Which of the following identifies a method for calculating beta?

a. Regress the monthly closing stock price against the monthly closing value of the S&P 500 Index using five years of historical data. The slope coefficient is beta.

b. Regress the daily stock return against the daily return of the NYSE Composite index using one year of historical data. The slope coefficient is beta.

c. Same as "a" except that the intercept is beta instead of the slope coefficient.

d. Same as "b" except that the intercept is beta instead of the slope coefficient.

e. Same as "b" except that you cannot use daily data to calculate beta.

2. The returns for the Goldigova Syndicate over the last 4 years are given below.

Assuming no dividends were paid, what was the 5-year “AVERAGE” holding period return (geometric return)?

Year 1 return = 11%

Year 2 return = - 6%

Year 3 return = - 4%

Year 4 return = 7.5%

Year 5 return = 3.2%

B) What is the average (arithmetic) return?

Reference no: EM132053176

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