Question: USE THE FOLLOWING INFORMATION FOR THE NEXT TWO PROBLEMS Rates of Return: Year RA Computer Market Index 1 13 17 2 9 15 3 -11

USE THE FOLLOWING INFORMATION FOR THE NEXT TWO PROBLEMS

Rates of Return:

Year RA Computer Market Index

1 13 17

2 9 15

3 -11 6

4 10 8

5 11 10

6 6 12

Compute the beta for RA Computer using the historic returns presented above:

  1. 0.7715
  2. 1.2195
  3. 1.3893
  4. 1.1023
  5. -0.7715

Compute the correlation coefficient between RA Computer and the Market Index.

  1. -0.32
  2. 0.78
  3. 0.66
  4. 0.58
  5. 0.32

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