Using monthly data for Meta since its IPO date of 31/12/2019, estimate equity beta for Meta. Compare

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Question:

Using monthly data for Meta since its IPO date of 31/12/2019, estimate equity beta for Meta. Compare your estimate of Meta’s equity beta with Facebook’s beta provided by Yahoo Finance and comment on any differences.

Guidelines:

- Go to Yahoo Finance (finance.yahoo.com/), then enter the search term “Meta”, then click on “Historical Data” and get monthly prices (AdjClose) of Meta for the required period, and use this information to calculate the monthly return series for Meta. - Go to Yahoo Finance (finance.yahoo.com/), then enter the search term “S&P500”, then click on “Historical Data” and get monthly data (AdjClose) of S&P for the required period, and use this information to calculate the monthly market return series.

- Go to Yahoo Finance (finance.yahoo.com/), under the “Markets Tab”, you will find US Treasury Bonds Rates, then look for Treasury Yield 10 Years (listed symbol “TNX”) then click on “Historical Data” and get monthly data (AdjClose) of TNX for the required period, and use this information to calculate the monthly risk-free rate series.

- Use Excel to estimate Meta’s equity beta. You will need to report the summary output of the regression in the report.