Question: Perform a Regression on this data. Year Return on Stock Z Return on S&P 500 1 10% 5% 2 -15 -10 3 15 10 4
Perform a Regression on this data.
| Year | Return on Stock Z | Return on S&P 500 |
| 1 | 10% | 5% |
| 2 | -15 | -10 |
| 3 | 15 | 10 |
| 4 | 5 | 0 |
| 5 | -5 | -10 |
Follow these steps with the data you entered above: Enter returns on stock Z as y variable range. Enter returns on S&P 500 as x variable range. Plot a scatter diagram from the returns given. Estimate the beta for stock Z. Provide a linear equation relating stock Z returns to returns on the S&P 500 index. What type of relationship between the two variables is predicted from your equation? If the return on the S&P 500 index is expected to be 10% over the next year, using your regression equation what is the expected return on stock Z over the same period?
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