Reuters reported the market beta for Xerox was 1.22 (Reuters website, January 30, 2009). Market betas for
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S&P 500 Horizon
1.2 ............. – .7
–2.5 ............. –2.0
–3.0 ............. –5.5
2.0 ............. 4.7
5.0 ............. 1.8
1.2 ............. 4.1
3.0 ............. 2.6
–1.0 ............. 2.0
.5 ............. –1.3
2.5 ............. 5.5
a. Develop an estimated regression equation that can be used to predict the market beta for Horizon Technology. What is Horizon Technology’s market beta?
b. Test for a significant relationship at the .05 level of significance.
c. Did the estimated regression equation provide a good fit? Explain.
d. Use the market betas of Xerox and Horizon Technology to compare the risk associated with the two stocks.
Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...
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Related Book For
Essentials Of Statistics For Business And Economics
ISBN: 9781305081598
7th Edition
Authors: David Anderson, Thomas Williams, Dennis Sweeney, Jeffrey Cam
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