Question

In: Finance

Calculate Beta for Apple and Microsoft, using a characteristic line. Display the data points on a...

  1. Calculate Beta for Apple and Microsoft, using a characteristic line. Display the data points on a graph and display the characteristic line.
    Year Microsoft Apple Market
    Jan 2010 - Dec 2010 1 -0.34% 3.85% 14.93%
    Jan 2011 - Dec 2011 2 -0.37% 2.09% 2.06%
    Jan 2012 - Dec 2012 3 0.40% 2.87% 15.84%
    Jan 2013 - Dec 2013 4 2.81% 0.38% 32.21%
    Jan 2014 - Dec 2014 5 1.91% 3.05% 13.53%
    Jan 2015 - Dec 2015 6 1.75% -0.45% 1.34%
    Jan 2016 - Dec 2016 7 1.37% 1.24% 11.80%
    Jan 2017 - Dec 2017 8 2.72% 3.41% 21.69%
    Jan 2018 - Dec 2018 9 1.41% -0.33% -4.45%
    Jan 2019 - Dec 2019 10 4.06% 5.89% 31.29%
    Average Return 1.57% 2.20% 14.02%
    Std Deviation 1.42% 2.02% 12.21%
    Correlation with the market 0.61 0.57 1.00
    Beta 0.07 0.09 1.00

    Beta Calculation
    Run a regression line of past returns on Stock I versus returns on the market. The regression line is the characteristic line.
    Year rM ri
    1
    2
    3
    4
    5
    6
    7
    8
    9
    10

Solutions

Expert Solution

Year Microsoft Apple Market Calculation Of Beta
Jan 2010- Dec 2010 1 -0.34% 3.85% 14.93%
Jan 2011-Dec 2011 2 -0.37% 2.09% 2.06% Beta of Microsoft Beta of Apple
Jan 2012-Dec 2012 3 0.40% 2.87% 15.84% 0.070527 0.093861
Jan 2013-Dec 2013 4 2.81% 0.38% 32.21% 0.071995 0.092698
Jan 2014-Dec 2014 5 1.91% 3.05% 13.53% 0.058687 0.104851
Jan 2015-Dec 2015 6 1.75% -0.45% 1.34% 0.594003 0.562892
Jan 2016-Dec 2016 7 1.37% 1.24% 11.80% 0.580158 0.546955
Jan 2017-Dec 2017 8 2.72% 3.41% 21.69% 0.577716 0.545479
Jan 2018-Dec 2018 9 1.41% -0.33% -4.45% 0.58929 0.54952
Jan 2019-Dec 2019 10 4.06% 5.89% 31.29% 0.585988 0.54518
Average Return 1.57% 2.20% 14.02% 0.582432 0.54192
std Deviation 1.42% 2.02% 12.21% 0.618096 0.561246
Correlation with the market 0.61 0.57 1
Beta 0.07 0.09 0.01
= Correlation *(Standard Deviation of stock)
Standard deviation of Market 0.0709419 0.0942998
Beta is the slope of the regression line . As seen in the graph
Apple y = 0.0939x + 0.0088 Beta = .0939
Microsoft y = 0.0705x + 0.0058 Beta = .0705

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Calculate Beta for Apple and Microsoft, using a characteristic line. Display the data points on a...
Calculate Beta for Apple and Microsoft, using a characteristic line. Display the data points on a graph and display the characteristic line. Yearly Returns Microsoft Apple Market Jan 2010 - Dec 2010 Year. 1 -0.34% 5.18% 14.93% Jan 2011 - Dec 2011 Year. 2 -0.37% 7.93% 2.06% Jan 2012 - Dec 2012 Year. 3 0.40% 5.15% 15.84% Jan 2013 - Dec 2013 Year 4 2.81% 5.99% 32.21% Jan 2014 - Dec 2014 Year. 5 1.91% 4.62% 13.53% Jan 2015 -...
Using CAPM, calculate the Expected Return for Apple and Microsoft. Get the relevant market related data,...
Using CAPM, calculate the Expected Return for Apple and Microsoft. Get the relevant market related data, such as the “risk-free rate” and “market return”, and describe which rate you are using from the financial markets Year Microsoft Apple Market Jan 2010 - Dec 2010 1 -0.34% 5.18% 14.93% Jan 2011 - Dec 2011 2 -0.37% 7.93% 2.06% Jan 2012 - Dec 2012 3 0.40% 5.15% 15.84% Jan 2013 - Dec 2013 4 2.81% 5.99% 32.21% Jan 2014 - Dec 2014...
We can calculate beta as the slope of the SCL(Security Characteristic Line) or as cov(ri, rM)/sM2....
We can calculate beta as the slope of the SCL(Security Characteristic Line) or as cov(ri, rM)/sM2. Which way is better and why?
beta numbers (1.1 for Apple and 0.8 for Microsoft), would you give me the "fake" return...
beta numbers (1.1 for Apple and 0.8 for Microsoft), would you give me the "fake" return values for these stocks. And using those return values, would you please calculate the "fake" Portfolio Return. Amt Invested Portfolio Weights Expected Portfolio Return Total Portfolio Value Portfolio Beta Microsoft $333,000.00 0.33 1.60% 0.8 Apple $670,000.00 0.67 1.90% 1.1 Both $1,000,000.00 Yearly Stock Return Year Market Microsoft Apple 1 14.93% -0.34% 3.86% 2 2.06% -0.37% 2.09% 3 15.84% 0.40% 2.87% 4 32.21% 2.81% 0.38%...
For the following data​ (a) display the data in a scatter​ plot, (b) calculate the correlation...
For the following data​ (a) display the data in a scatter​ plot, (b) calculate the correlation coefficient​ r, and​ (c) make a conclusion about the type of correlation. The ages​ (in years) of 6 children and the number of words in their vocabulary ​ Age, x 1 2 3 4 5 6 Vocabulary​ size, y 150 1100 1150 1800 2050 2700 A] The correlation coefficient r is
The Bobs want to know if Apple computers are better than Microsoft. Corporations using the Bobs...
The Bobs want to know if Apple computers are better than Microsoft. Corporations using the Bobs consulting agency are surveyed for their employees’ use of Apple versus Microsoft computers and their level of productivity. The data is summarized below. Use α = .01. ** I need to see work for FULL points. Please show your work on scrap paper!!** Productivity Apple Microsoft Total Bad 66 23 89 Average 62 74 136 Great 71 15 86 Total 199 112 311 What...
Characteristic Line and Security Market Line You are given the following set of data: HISTORICAL RATES...
Characteristic Line and Security Market Line You are given the following set of data: HISTORICAL RATES OF RETURN Year      NYSE         Stock X 1 - 26.5% - 17.0% 2 37.2    16.0    3 23.8    14.0    4 - 7.2    5.0    5 6.6    9.9    6 20.5    19.4    7 30.6    17.9    Use a spreadsheet (or a calculator with a linear regression function) to determine Stock X's beta coefficient. Round your answer to two decimal places. Beta = Determine the arithmetic average rates of return for...
showing your work, use the 2018-2019 10k from apple and microsoft to calculate the average days...
showing your work, use the 2018-2019 10k from apple and microsoft to calculate the average days to collect as well as inventory turnover ratio. file:///C:/Users/chase/Downloads/Apple%2010-K%20for%202018.pdf file:///C:/Users/chase/Downloads/Microsoft%2010-K%20for%202019.pdf
For the following sample, display the data using a frequency distribution table and then using a...
For the following sample, display the data using a frequency distribution table and then using a histogram . Assume the data is continuous and measured on a ratio scale. 23 21 18 17 17 15 20 3 4 28 16 15 15 15 27 2 3 15 16 16 a) How would you describe the shape of the distribution? b) Which is the most appropriate measure of central tendency? c) Calculate the most appropriate measure of central tendency.
Use the following data to explore the risk-return relation and the concept of beta for Apple...
Use the following data to explore the risk-return relation and the concept of beta for Apple stock, Alphabet (Google) stock, and the S&P 500 market index: Year Apple Stock Price Alphabet Stock Price S&P 500 Market Index 2017 $174.09 $1,072.01 2,601.42 2016 $115.82 $807.80 2,238.83 2015 $105.26              $765.84 2,043.94 2014 $113.99 $521.51 2,058.90 2013 $80.01 $559.76 1,848.36 2012 $72.80 $358.17 1,426.19 Market risk premium: RPM = 4.01% Risk-free rate: rRF = 1.30% Calculate the portfolio beta of the four-stock portfolio...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT