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Question
(this problem illustrates the computation of beta coefficients may be solved using the investment analysis calculator or excel.) the returns on the market and stock a and stock b are as follows:
period market stock a stock b
1 10% 9% 12%
2 15 25 25
3 3 6 5
4 7 12 6
5 4 1 9
6 5 10 1
7 8 7 5
8 13 15 1
9 15 23 12
10 3 9 10
compute the beta coefficient for each stock and interpret the results of the computations.
Answer
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