Suppose you have the following historical returns for the stock market and for another company, P.Q. Unlimited.
Question:
Suppose you have the following historical returns for the stock market and for another company, P.Q. Unlimited. Explain how to calculate beta, and use the historical stock returns to calculate the beta for PQU. Interpret your results.
Transcribed Image Text:
YEAR MARKET PQU 25.7% 40.0% -15.0% 8.0% -11.0% 3 -15.0% 35.0% 10.0% 15.0% 32.5% 13.7% 30.0% 40.0% 42.0% 10.0% -10.0% -25.0% -10.8% 10 -13.1% 25.0%
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Betas are calculated as the slope of the characteristic line which is the regression line s...View the full answer
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Related Book For
Financial management theory and practice
ISBN: 978-0324422696
12th Edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt
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