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Derive the beta of aaa inc based on the information provided

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Reference no: EM13504120

Question 1. Estimation of CAPM Beta and Market Risk

AAA, Inc. has the following % returns on its stock, relative to the listed changes in the % return on the market portfolio (S&P 500 or SPY).

Month     Market Return %     AAA Return %

 

1                    +1                        +1.9 2                    +1                  +3.5 3                    +1                         -0.4 4               -1                      -2.5 5            -1                 +0.1

6                    -1                         -3.8

 

 

Question: Derive the Beta of AAA, Inc based on the information provided above.

Hint: Review Class #6 – Part 1, including the example of “Turbo Charged Seafood” in Sections 2.3-2.5.

Reference no: EM13504120

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