a)  Choose one of the three market indexes and briefly explain why you select that particular index.

b) Compare the average return of your stock to the industry average return as well as the expected return predicted by the CAPM model and comment on the outcomes.

Average return	1.850%
Variance	0.001677508
Standard deviation	0.040957392
Industry average return	1.700%
Industry standard deviation	0.053401379
Covariance with market	0.000804452
beta	1.096120312
Expected return based on CAPM	0.905652053801554200%

	Value-Weighted Return-incl. dividends	Equal-Weighted Return-incl. dividends	Return on the S&P 500 Index
Average return	1.14%	0.92%	1.09%
Variance	0.000748	0.000932	0.000734
Standard deviation	0.027343	0.030526	0.027091

Answer rating: 100% (QA)

I chose the SP 500 Index because it is a broad measure of the stock market and it includes 500 of th... View the full answer