{"id":434515,"date":"2018-06-23T16:52:44","date_gmt":"2018-06-23T16:52:44","guid":{"rendered":"https:\/\/essaypaper.org\/?p=28455"},"modified":"2018-10-24T09:13:40","modified_gmt":"2018-10-24T09:13:40","slug":"business-finance-beta-assignment","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/business-finance-beta-assignment\/","title":{"rendered":"Business & Finance-Beta Assignment"},"content":{"rendered":"

Beta Assignment<\/h2>\n

Calculate the beta of your stock using the \u201cmarket model\u201d: \u00a0RS<\/sub>\u00a0\u00a0 =\u00a0 a \u00a0+ b * (Rm<\/sub>) + e<\/h1>\n

Regression equation:\u00a0 E(Y) \u00a0= \u00a0a \u00a0+ b(X)\u00a0 \u00a0+\u00a0\u00a0 error<\/p>\n

\u00a0(Predicted return on the stock)<\/u><\/em> \u00a0\u00a0=\u00a0 intercept\u00a0 +\u00a0 BETA * (Return on market index<\/u><\/em>)<\/p>\n

    \n
  1. Download weekly historical price data in spreadsheet format for your stock<\/u> using the range 6\/1\/2017 to 6\/1\/2018 from finance.yahoo.com using the \u2018Historical Prices\u2019 function. Save it in CSV (spreadsheet) format.\u00a0 For the same dates, download the values of the S&P 500 Index<\/u> (use ticker symbol ^GSPC<\/strong>).<\/li>\n
  2. Open the stock price data file using MS Excel and save it as a workbook<\/strong> (.xlsx, NOT .csv). Copy the closing values of the index into the same spreadsheet as the stock prices; be careful to check that the dates line up <\/strong>and there are no missing observations. Use the \u201cadjusted close\u201d.<\/strong> You can discard the other prices and volume figures.<\/li>\n
  3. Create weekly returns (Rx) from the series of weekly stock closing prices<\/u> using the formula below and the \u201cadjusted\u201d close prices<\/strong>. BE CAREFUL to check that your formula is correct, and that you haven\u2019t accidentally reversed P1 <\/sub>and Po<\/li>\n<\/ol>\n

    R1<\/sub> = (P1<\/sub>\/P0<\/sub>) \u2013 1<\/p>\n

      \n
    1. Create weekly returns from the series of weekly index data (Rm<\/sub>)<\/strong><\/u> the same way, being careful to line up the dates. (Note: there will be one less observation in each series than you started with.)<\/li>\n
    2. Estimate the intercept and beta using linear regression following the example at the top of this page (the market model). Select \u201cshow the results in a new sheet\u201d.\u00a0 Use total returns, not excess returns (i.e., do not subtract the risk-free rate).\u00a0 Use the \u201cregression\u201d tool in the \u201cdata analysis\u201d package in the \u201ctools\u201d menu; if it\u2019s not already loaded, you\u2019ll have to use \u201cadd-ins\u201d to add it.<\/em><\/strong><\/li>\n
    3. Download the summary page spreadsheet from Blackboard<\/u><\/strong> and place it in your workbook. Fill in all of the blanks. There should be at least 3 tabs in your workbook<\/u><\/strong>: 1) the weekly returns data, 2) the regression output, and 3) the summary page. Submit your workbook through the Assignment module on Blackboard.<\/strong><\/u><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

      Beta Assignment Calculate the beta of your stock using the \u201cmarket model\u201d: \u00a0RS\u00a0\u00a0 =\u00a0 a \u00a0+ b * (Rm) + e Regression equation:\u00a0 E(Y) \u00a0= \u00a0a \u00a0+ b(X)\u00a0 \u00a0+\u00a0\u00a0 error \u00a0(Predicted return on the stock) \u00a0\u00a0=\u00a0 intercept\u00a0 +\u00a0 BETA * Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-434515","post","type-post","status-publish","format-standard","hentry","category-essay-paper-writing"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/434515","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=434515"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/434515\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=434515"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=434515"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=434515"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}