Consider the following information on the returns on the market and Fuji stock: Economy Bear Bull...

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Consider the following information on the returns on the market and Fuji stock: Economy Bear Bull Expected return on Expected Return on Market (%) Fuji (%) 2.5% 16.3 3.4% 12.8% a. Calculate the beta of Fuji. What is the responsiveness of Fuji's return to movements of the market? b. Suppose the estimate of expected return on the market is -4.0 percent. Using your answer in part (a), what should be the expected return on Fuji in this case? Consider the following information on the returns on the market and Fuji stock: Economy Bear Bull Expected return on Expected Return on Market (%) Fuji (%) 2.5% 16.3 3.4% 12.8% a. Calculate the beta of Fuji. What is the responsiveness of Fuji's return to movements of the market? b. Suppose the estimate of expected return on the market is -4.0 percent. Using your answer in part (a), what should be the expected return on Fuji in this case?

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To calculate the beta of Fuji we need to use the following formula Beta CovarianceFuji Market Varian... View the full answer