Part D$)$ Graph

Insert a Scatter Plot to plot the stock returns $(y-$axis$)$ versus the market returns $(x-$axis$).$ To do so$,$ select

the Insert Tab and then select Charts, and finally select the Chart Type for a Scatter Plot. Right click on the

chart and choose Select Data. After the data is plotted, add axes titles and the chart title. Finally, right

click on a data point, and select Add Trendline. Choose a linear trendline and select Display Equation on

Chart.

Part E$)$ Beta

Using the Excel function $=$COVARIANCE.S$(),$ calculate the sample covariance between the stock and market

returns. Using the Excel function $=$VAR.S$(),$ calculate the sample variance of the market returns. Calculate

the beta of the stock using the following formula:

Beta $=\frac{\text{C}\text{o}\text{v}\text{a}\text{r}\text{i}\text{a}\text{n}\text{c}\text{e}(r_i,r_M)}{\text{V}\text{a}\text{r}\text{i}\text{a}\text{n}\text{c}\text{e}(r_M)}$

Use the Excel slope function, $=$ SLOPE$(),$ to calculate the slope from stock returns $(y-$axis$)$ vs$.$ market returns

$(x-$axis$).$