Question: Your CIO is asking you to compute each stocks sensitivity (i.e. ) to the equity market using the same monthly data for the previous 5

Your CIO is asking you to compute each stocks sensitivity (i.e. ) to the equity market using the same monthly data for the previous 5 years. After talking to your investment team, you decide to use the S&P 500 as the market portfolio (SPY).

(b) Which stock has the highest and lowest beta? Why? Please comment

Your CIO is asking you to compute each stocks sensitivity (i.e. )

Please explain why amazon has the highest beta and why nike has the lowest beta.

NKE AMZN SBUX TGT YUM Beta Slope of CAPM Formua by hand S&P 500 1.000 0.776 0.812 0.966 1.247 1.247 0.857 0.857 0.776 0.812 0.966 1.000 Alpha 0.011 0.023 0.008 0.010 0.005 0.000

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