Berkshire Hathaway (ticker: BRK/A) is an American multinational conglomerate holding company headquartered in Omaha, Nebraska. The...
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Berkshire Hathaway (ticker: BRK/A) is an American multinational conglomerate holding company headquartered in Omaha, Nebraska. The company is known for its control and leadership by Warren Buffett. The data in the table above show the annual rate of return, in percentage, for BRK/A and the S&P 500 index with dividends included for the 10 year period spanning 2010 to 2019. The risk-free rate is zero. Note that the numbers in parenthesis denote negative rates of return, and BRK/A does not pay a dividend. You are asked to model the annual returns for BRK/A using a one-factor model, with the S&P 500 index annual returns with dividends included as the one factor as follows: TBRK/A=a+s&P500 +€ Find the optimal values for a and 3, using all the data in the table, such that the total squared error is minimized, where the total squared error is equal to 10 ZE=1 What is the value of 3? Please round your numerical answer to four decimal places. Year 2010...... 2011... 2012 2013 2014 Berkshire's Performance vs. the S&P 500 Annual Percentage Change 2015.... 2016. 2017 2018 2019 **** in Per-Share Market Value of Berkshire 21.4 (4.7) 16.8 32.7 27.0 (12.5) 23.4 21.9 2.8 11.0 in S&P 500 with Dividends Included 15.1 2.1 16.0 32.4 13.7 1.4 12.0 21.8 (4.4) 31.5 Berkshire Hathaway (ticker: BRK/A) is an American multinational conglomerate holding company headquartered in Omaha, Nebraska. The company is known for its control and leadership by Warren Buffett. The data in the table above show the annual rate of return, in percentage, for BRK/A and the S&P 500 index with dividends included for the 10 year period spanning 2010 to 2019. The risk-free rate is zero. Note that the numbers in parenthesis denote negative rates of return, and BRK/A does not pay a dividend. You are asked to model the annual returns for BRK/A using a one-factor model, with the S&P 500 index annual returns with dividends included as the one factor as follows: TBRK/A=a+s&P500 +€ Find the optimal values for a and 3, using all the data in the table, such that the total squared error is minimized, where the total squared error is equal to 10 ZE=1 What is the value of 3? Please round your numerical answer to four decimal places. Year 2010...... 2011... 2012 2013 2014 Berkshire's Performance vs. the S&P 500 Annual Percentage Change 2015.... 2016. 2017 2018 2019 **** in Per-Share Market Value of Berkshire 21.4 (4.7) 16.8 32.7 27.0 (12.5) 23.4 21.9 2.8 11.0 in S&P 500 with Dividends Included 15.1 2.1 16.0 32.4 13.7 1.4 12.0 21.8 (4.4) 31.5
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ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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