Question

On Blackboard under "Course Content / Homeworks and Practice Tests" there is an Excel file titled "HW 6 Data" with monthly stock return data to be used for this question: What is Deckers Outdoor Corporation's [DECK] beta? Round to two decimal places. [Hint: Take S&P 500 as a proxy for the market, and use the beta formula from the book. You will need to use two Excel functions: STDEV.S and CORREL] Numeric Answer

Answer 1

	Deck	S&P500
Oct-19	7.40%	1.90%
Sep-19	3.80%	2.20%
Aug-19	-0.10%	1.90%
Jul-19	-5.70%	-1.60%
Jun-19	-11.20%	1.40%
May-19	15.70%	7.00%
Apr-19	-3.90%	-6.40%
Mar-19	7.60%	4.00%
Feb-19	-0.60%	1.90%
Jan-19	15.20%	3.20%
Dec-18	0.40%	8.00%
Nov-18	-4.00%	-9.00%
Oct-18	4.80%	2.00%
Sep-18	7.20%	-6.80%
Aug-18	-2.70%	0.60%
Jul-18	8.00%	3.30%
Jun-18	-0.10%	3.70%
May-18	-0.20%	0.60%
Apr-18	21.30%	2.40%
Mar-18	3.60%	0.40%
Feb-18	-4.80%	-2.50%
Jan-18	10.30%	-3.70%
Dec-17	6.80%	5.70%
Nov-17	7.40%	1.10%
Oct-17	9.50%	3.10%
Sep-17	-0.20%	2.30%
Aug-17	7.10%	2.10%
Jul-17	-1.50%	0.30%
Jun-17	-5.00%	2.10%
May-17	-1.60%	0.60%
Apr-17	16.40%	1.40%
Mar-17	-0.20%	1.00%
Feb-17	13.10%	0.10%
Jan-17	-8.30%	4.00%
Dec-16	4.00%	1.90%
Nov-16	-6.90%	2.00%
Oct-16	14.00%	3.70%
Sep-16	-12.40%	-1.80%
Aug-16	-8.90%	0.00%
Jul-16	-1.00%	0.10%
Jun-16	14.80%	3.70%
May-16	9.40%	0.30%
Apr-16	-9.00%	1.80%
Mar-16	-3.50%	0.40%
Feb-16	5.90%	6.80%
Jan-16	14.40%	-0.10%
Dec-15	4.80%	-5.00%
Nov-15	-3.60%	-1.60%
Oct-15	-12.10%	0.30%
Sep-15	-4.10%	8.40%
Aug-15	-9.80%	-2.50%
Jul-15	-11.60%	-6.00%
Jun-15	1.30%	2.10%
May-15	5.60%	-1.90%
Apr-15	-7.90%	1.30%
Mar-15	1.60%	1.00%
Feb-15	-1.80%	-1.60%
Jan-15	12.40%	5.70%

Standard deviation Deck	0.082988015
Standard deviation Market	0.034468942
Correlation coefficient ( r)	0.294549987
Beta= r X (Std dev security/std dev mkt)
0.709163583