Calculate the Beta for Amazon for the calendar year 2020. Upload at least one worksheet to show your calculations. 

 

• Below are my calculations in terms of finding Beta for Amazon in the year 2020. I took the closing prices on a monthly basis and S&P 500 closing price on a monthly basis (resource is from Yahoo Finance).
• Daily Return for Amazon: (Closing Price - Previous Closing Price) / Previous Closing Price) * 100. I did the same for S&P 500 
• Next I ran a regression: Y variable is Amazon holding period return minus risk-free rate. X variable is S&P 500 holding period return minus risk-free rate. 

 

I set the risk-free rate at 1%. I'm not too sure where this information can be found. Any advice here would be great as it wasn't included in the problem. I also did a separate calculation for Covariance and Variance and got the same answer as my regression .8517 beta value

 

Please calculate beta with the closing prices provided in my worksheet 

  

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Risk Free Rate Date 1/1/20 2/1/20 3/1/20 4/1/20 5/1/20 6/1/20 7/1/20 8/1/20 9/1/20 10/1/20 11/1/20 12/1/20 AMZN 1 S&P 500 122.12 137.94 158.23 172.55 157.44 151.81 158.4 162.85 AMZN Holding Period Closing Price Closing Price Return (HPR) 100.44 3,225.52 94.19 2,954.22 -6.22262047 97.49 2,584.59 3.503556641 26.8848087 123.7 2,912.43 3,044.31 -1.277283751 3,100.29 3,271.12 3,500.31 12.95447101 14.7092939 9.050116918 3,363.00 -8.756882063 3,269.96 -3.575965447 3,621.63 4.340952506 3,756.07 2.809343434 S&P 500 Holding Period Return (HPR) AMZN Excess Return S&P 500 Excess Return -8.411046901 -7.2226205 -9.4110469 -12.51193208 2.50 25.88 12.68441029 4.528177501 -2.28 1.838840328 11.95 5.510129698 13.7092939 4.5101297 7.006468732 8.05011692 6.00646873 -3.92279541 -9.7568821 -4.9227954 -2.766577461 -4.5759654 -3.7665775 10.75456581 3.34095251 9.75456581 3.712140666 1.80934343 2.71214067 -13.51 11.68 3.53 0.84 Covariance Variance Beta Daily Return for Amazon: (Closing Price - Previous Closing Price) / Previous Closing Price) * 100 47.4759576 55.7414658 0.85171706 Risk Free Rate Date 1/1/20 2/1/20 3/1/20 4/1/20 5/1/20 6/1/20 7/1/20 8/1/20 9/1/20 10/1/20 11/1/20 12/1/20 AMZN 1 S&P 500 122.12 137.94 158.23 172.55 157.44 151.81 158.4 162.85 AMZN Holding Period Closing Price Closing Price Return (HPR) 100.44 3,225.52 94.19 2,954.22 -6.22262047 97.49 2,584.59 3.503556641 26.8848087 123.7 2,912.43 3,044.31 -1.277283751 3,100.29 3,271.12 3,500.31 12.95447101 14.7092939 9.050116918 3,363.00 -8.756882063 3,269.96 -3.575965447 3,621.63 4.340952506 3,756.07 2.809343434 S&P 500 Holding Period Return (HPR) AMZN Excess Return S&P 500 Excess Return -8.411046901 -7.2226205 -9.4110469 -12.51193208 2.50 25.88 12.68441029 4.528177501 -2.28 1.838840328 11.95 5.510129698 13.7092939 4.5101297 7.006468732 8.05011692 6.00646873 -3.92279541 -9.7568821 -4.9227954 -2.766577461 -4.5759654 -3.7665775 10.75456581 3.34095251 9.75456581 3.712140666 1.80934343 2.71214067 -13.51 11.68 3.53 0.84 Covariance Variance Beta Daily Return for Amazon: (Closing Price - Previous Closing Price) / Previous Closing Price) * 100 47.4759576 55.7414658 0.85171706

Answer rating: 100% (QA)

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