Question

13. Calculate Beta for Asset H (Just follow the steps). I NEED to see your work. Return Deviations Asset Market Deviations^2 Asset Market Year 2015 2016 2017 Returns Asset 0.13 0.114 0.105 Market 0.12 0.05 0.065 Var SD Covariance = 2011 Return Deviations Asset A. Return Deviations Market N - 1 Return Deviations Asset Market Dev H DevMkt Year 2015 2016 2017 Covariance = 1 Covariance Correlation market Bi-Correlation- market

Answer 1

The average returns of the asset is calculated as

0.13 + 0.114 + 0.105 Average returns of the asset = - = 0.1163

0.12 +0.05 +0.065 Average returns of the market = - = 0.0783

			Return deviation		Deviations ^2
Year	Asset	Market	Asset H	Market	Asset H	Market
2015	0.13	0.12	0.13 - 0.1163 = 0.0137	0.12 - 0.0783 = 0.0417	0.00018769	0.00173889
2016	0.114	0.05	0.114 - 0.1163 = -0.0023	0.05 - 0.0783 = -0.0283	0.00000529	0.00080089
2017	0.105	0.065	0.105 - 0.1163 = -0.0113	0.065 - 0.0783 = -0.0133	0.00012769	0.00017689
					Var H = 0.00010689	Var M = 0.000905557
					SD = 0.010338762	SD M = 0.030092469

			Return deviation
Year	Asset	Market	Asset H	Market	DevH * Dev Market
2015	0.13	0.12	0.0137	0.0417	0.0137 × 0.0417 = 0.00057129
2016	0.114	0.05	-0.0023	-0.0283	-0.0023 × -0.0283 = 0.00006509
2017	0.105	0.065	-0.0113	-0.0133	- 0.0113 × - 0.0133 = 0.00015029
					∑ = 0.00078667

Covariance = 0.00078667 3-1

Covariance = 0.000393335

0.000393335 relation + 0.010338762 x 0.030092469

Correlation = 1.2643

0.010338762 Beta = 1.2643 X 0.030092469

Beta for Asset H = 0.43