Question

Suppose the market portfolio is equally likely to increase by 30% or decrease by 10% a. Calculate the beta of a firm that goes up on average by 43% when the market goes up and goes down by 17% when the market goes down. b. Calculate the beta of a firm that goes up on average by 18% when the market goes down and goes down by 22% when the market goes up. c. Calculate the beta of a firm that is expected to go up 4% independently of the market. a. Calculate the beta of a firm that goes up on average by 43% when the market goes up and goes down by 17% when the market goes down. (Round to two decimal places.) The beta is

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

File Home Insert Page Layout Formulas Data Review View Add-Ins - Cut AutoSum General Wrap Text Calibri 11 Fill Copy A Merge & Center Conditional Format Insert Delete Format Paste S % Cell Sort & Find & er Select 2 Clear Format Painter ble Styles Formatting Clipboard Font Alignment Number Shules Cells Editing EF48 DZ FA EB EC ED EE E EG EH EI FI Ek EL EM EN 33 CHANGE IN STOCK PRICE/ CHANGE IN MARKET 34 BETA= a (43-(-17))/(30-(-10)) = 35 1.50 36 37 CHANGE IN STOCK PRICE/CHANGE IN MARKET ((-18)- 22)/(30--10)) = 38 b BETA= 39 -1,00 40 41 IFA SECURITY MOVES INDEPENDENTLY THAT IS NOT DEPENDENT ON MARKET 42 C 43 THE BETA WILL BE ZERO 44 BETA= 0.00 45 46 47 48 49 50 51 cap stru WACC RESI ex div DIV POLICY NAME Sheet1 port future INDEX LEASING PV, FV, ANNUITY ETEMADI beta 130% O DIR right 14 INTL CAP BUD clean YIELD bond portfolo Sheet2 Re erences 04:00 ENG 16-06-2019