You have the following data on (1) the average annual returns of the market for the...
You have the following data on (1) the average annual returns of the market for the past 5 years and (2) similar information on Stocks A and B. Please calculate betas for Stock A and B.
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Homework Answers
I am doing it using excel,
lets fill the data in the resepective cells as shown below
Now, beta can be calculated as using following formula,
beta = covariance(stock,market)/variance(market)
by writing formulas in excel for finding beta of stock A and B as below,
beta of stock A = =COVARIANCE.P(C2:C6,B2:B6)/VAR.P(B2:B6) = 0.76087
beta of stock B = =COVARIANCE.P(D2:D6,B2:B6)/VAR.P(B2:B6) = 0
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You have the following data on (1) the average annual
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