Estimate the intercept alpha and beta for walgreens stock

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Reference no: EM13569206

EXCEL Below is nine months" return data for Walgreens and the S&P 500.

  1. Estimate the intercept (alpha) and beta for Walgreens stock using spreadsheet functions.
  2. Interpret what the slope estimate means to a stock analyst.
  3. Compute the R-squared of the regression using Excel"s RSQ function. What does the R-squared tell us about the relation- ship between Walgreens" returns and those of the market?

MONTH

WALGREENS RETURN

S&P500 RETURN

1

2.0%

7.5%

2

- 5.9%

1.8%

3

0.2%

8.2%

4

2.0%

- 6.4%

5

-2.2%

-1.1%

6

- 14.3%

- 2.5%

7

-6.0%

0.5%

8

4.9%

7.7%

9

- 7.9%

- 6.4%

Reference no: EM13569206

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