Question: Explain Excel Instructions Security Security A B Market Year Returns Returns Returns 6.00% 11.00% 10.00% 2 5.00% 8.60% 8.50% 3 1.00% 8.20% 7.00% 4 0.00%

Explain Excel Instructions Explain Excel Instructions Security Security A B Market Year Returns Returns Returns

Security Security A B Market Year Returns Returns Returns 6.00% 11.00% 10.00% 2 5.00% 8.60% 8.50% 3 1.00% 8.20% 7.00% 4 0.00% -3.00% -2.00% 5 -2.00% -7.00% -3.40% 6 5.00% 9.00% 8.25% 7 7.00% 13.90% 14.00% 3. Assume the risk free rate = 2.5% and using the betas from above and market returns from the above table, calculate the following: a. Security Market Line for security A b. Security Market line for security B C. Security risk premium of security A d. Security risk premium of security B

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