Question: The following table, , contains beta coefficient estimates for six firms. Calculate the expected increase in the value of each firm's shares if the market

The following table,

,

contains beta coefficient estimates for six firms. Calculate the expected increase in the value of each firm's shares if the market portfolio were to increase by 10 percent. Perform the same calculation where the market drops by 10 percent. Which set of firms has the most variable or volatile stock returns?

Input the expected increase in the value of each firm's shares if the market portfolio were to increase by 10%.(Round each answer to two decimal places.)

Company

Microsoft Money

Central MSN.com

Beta Estimate

Expected Increase

Computers and Software

Apple Inc. (AAPL)

2.91

%

Dell Inc. (DELL)

1.49

%

Hewlett Packard (HPQ)

1.38

%

Utilities

American Electric Power Co. (AEP)

0.67

%

Duke Energy Corp. (DUK)

0.36

%

Centerpoint Energy (CNP)

0.84

%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!