Question: PLEASE USE EXCEL FUNCTIONS ONLY AND DESCRIBE THE METHOD FOR UNDERSTANDING PURPOSES!, THANKS! 8. Refer to the table below: End of month Jul-19 Aug-19 Sep-19

PLEASE USE EXCEL FUNCTIONS ONLY AND DESCRIBE THE METHOD FOR UNDERSTANDING PURPOSES!, THANKS!

PLEASE USE EXCEL FUNCTIONS ONLY AND DESCRIBE THE METHOD FOR UNDERSTANDING PURPOSES!,

8. Refer to the table below: End of month Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Rates of return Share index Share A Risk-free asset -1.710% 4.786% 0.442% 3.337% -0.627% 0.436% 0.023% 0.076% 0.452% 1.799% -0.799% 0.413% 0.141% 0.316% 0.450% 0.028% 3.806% 0.449% -2.544% 4.211% 0.384% -2.105% -4.441% 0.445% -4.611% 4.062% 0.387% -3.200% 2.082% 0.453% -6.108% 1.839% 0.366% 7.443% 0.132% 0.308% (a) Calculate the monthly excess returns of the Share index and Share A. (2 marks) (b) Add a graph of the excess returns of Share A on the vertical axis (Y axis) and the Share index on the horizontal axis (X axis). On this graph, plot the linear regression line and display the regression equation and the R-squared. (2 marks) (c) Using appropriate Excel functions to calculate the Alpha, Beta and R-squared of the regression of the excess returns of the Share index on the excess returns of Share A. Provide a brief explanation on what these quantities measure. (3 marks) 8. Refer to the table below: End of month Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Rates of return Share index Share A Risk-free asset -1.710% 4.786% 0.442% 3.337% -0.627% 0.436% 0.023% 0.076% 0.452% 1.799% -0.799% 0.413% 0.141% 0.316% 0.450% 0.028% 3.806% 0.449% -2.544% 4.211% 0.384% -2.105% -4.441% 0.445% -4.611% 4.062% 0.387% -3.200% 2.082% 0.453% -6.108% 1.839% 0.366% 7.443% 0.132% 0.308% (a) Calculate the monthly excess returns of the Share index and Share A. (2 marks) (b) Add a graph of the excess returns of Share A on the vertical axis (Y axis) and the Share index on the horizontal axis (X axis). On this graph, plot the linear regression line and display the regression equation and the R-squared. (2 marks) (c) Using appropriate Excel functions to calculate the Alpha, Beta and R-squared of the regression of the excess returns of the Share index on the excess returns of Share A. Provide a brief explanation on what these quantities measure

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