Question: The attached Excel File contains information regarding the returns (%) on the S&9 500 Market Index and the returns (%) on Amazon Stocks over a
The attached Excel File contains information regarding the returns (%) on the S&9 500 Market Index and the returns (%) on Amazon Stocks over a period of time.
| S&P500 | Amazon |
| 0.030 | 0.042 |
| 0.030 | 0.052 |
| 0.039 | 0.032 |
| 0.023 | 0.084 |
| 0.034 | 0.085 |
| 0.000 | 0.010 |
| 0.043 | 0.021 |
| -0.006 | -0.030 |
| 0.044 | 0.025 |
| 0.019 | -0.013 |
| 0.035 | 0.016 |
| 0.008 | -0.008 |
| 0.009 | 0.011 |
| 0.015 | 0.007 |
| 0.025 | 0.005 |
| 0.002 | -0.001 |
| -0.052 | -0.055 |
| 0.021 | 0.029 |
| 0.058 | 0.045 |
| 0.028 | 0.027 |
| 0.078 | 0.072 |
| -0.024 | -0.023 |
| 0.066 | 0.049 |
| 0.007 | -0.015 |
| -0.048 | -0.040 |
| 0.063 | 0.050 |
| 0.063 | 0.079 |
| 0.047 | 0.046 |
| 0.083 | 0.092 |
| -0.065 | -0.052 |
| 0.057 | 0.065 |
| -0.039 | -0.040 |
| 0.048 | 0.022 |
| 0.017 | 0.013 |
| 0.011 | 0.012 |
| 0.075 | 0.084 |
| 0.054 | 0.056 |
| 0.010 | 0.013 |
| -0.021 | -0.025 |
| 0.043 | 0.048 |
| -0.013 | -0.009 |
(1) Please run a regression with the returns on Amazon Stocks as the dependent variable and the returns on the S&P 500 as the independent variable and present your regression output.
(2) Are the intercept and slope coefficients statistically different from 0 at the 1%, 5%, and 10% levels?
(3) What does the R-square imply?
(4) Based on the regression results, what is the predicted return on Amazon Stock if the return on the S&P 500 is 10% (0.1)?
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