Stock Beta. In June 2021 Yahoo Finance reported the beta value for Coca-Cola was .61 (Yahoo Finance website). Betas for individual stocks are determined by simple linear regression. The dependent variable is the total return for the stock, and the independent variable is the total return for the stock market, such as the return of the S&P 500. The slope of this regression equation is referred to as the stock’s beta. Many financial analysts prefer to measure the risk of a stock by computing the stock’s beta value. The data show the monthly percentage returns for the S&P 500 and the Coca-Cola Company for July 2020 to June 2021. Answer the following questions. **Educational Website Transcription:**1. **Develop a scatter diagram with the S&P% Return as the independent variable.** - **Instruction:** Label this graph as "Scatterplot Coke vs S&P"2. **What does the scatter diagram developed in part (1) indicate about the relationship between the returns of the S&P 500 and those of the Coca-Cola Company?** - **Response Area:** State your answer here3. **Develop the least squares estimated regression equation.** - **Instruction:** State your answer here. Use actual names of the variables instead of saying YHAT and X.4. **Provide an interpretation for the slope of the estimated equation (i.e., the beta).** - **Response Area:** State your answer here5. **Is your beta estimate close to .61? If not, why might your estimate be different?** - **Response Area:** State your answer here6. **Do a residual plot and state whether all regression assumptions are met. (Use the standard residuals reported by Excel)** - **Instruction:** Label this graph as "Residual Plot" - **Conclusion Area:** State your conclusion about the assumptions here ### Monthly Percentage Returns for S&P 500 and Coca-ColaThis table presents the monthly percentage returns for the S&P 500 index and Coca-Cola stock over a one-year period.| Month | S&P 500 % Return | Coca-Cola % Return ||-----------|------------------|--------------------|| July | -7.00 | -5 || August | 4.00 | 0 || September | 3.00 | 3 || October | -10.00 | -7 || November | -4.00 | -6 || December | 1.00 | 14 || January | -3.00 | -2 || February | -4.00 | -7 || March | -5.00 | -2 || April | -1.00 | -2 || May | -2.00 | 2 || June | 0.00 | 0 |**Interpretation:**- **S&P 500 Returns**: The index had fluctuating performance, with the most significant drop in October (-10.00%) and the highest gain in August (4.00%).- **Coca-Cola Returns**: Coca-Cola displayed more consistent returns, with a notable spike in December (14%) and a significant decline in October (-7%).- **Comparison**: Coca-Cola outperformed the S&P 500 in December, while both experienced downturns in October. Other months showed diverse performance when compared with each other.

Given data: S&P 500 Coca-Cola -7 -5 4 0 3 3 -10 -7 -4 -6 1 14 -3 -2 -4 -7…

Answered: 1. Develop a scatter diagram with the…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Stock Beta. In June 2021 Yahoo Finance reported the beta value for Coca-Cola was .61 (Yahoo Finance website). Betas for individual stocks are determined by simple linear regression. The dependent variable is the total return for the stock, and the independent variable is the total return for the stock market, such as the return of the S&P 500. The slope of this regression equation is referred to as the stock’s beta. Many financial analysts prefer to measure the risk of a stock by computing the stock’s beta value. The data show the monthly percentage returns for the S&P 500 and the Coca-Cola Company for July 2020 to June 2021. Answer the following questions.