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Calculate the beta of Woods.

Calculate the beta of Woods.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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You may attempt this question 3 more times for credit. Financial analysts have estimated the returns on shares of the Woods Corporation and the overall market portfolio under two economic states nature as follows. For Woods the state dependent returns are -0.03 in recession, and 0.08 in an economic boom. For the market the state dependent returns are -0.04 in recession, and 0.08 in boom. The analyst estimates that the probability of a recession is 0.50 while the probability of an economic boom is 0.50. Calculate the beta of Woods. * State your answer in decimal form, working your analysis using at least four decimal places of accuracy. CHECK ANSWER
Transcribed Image Text:You may attempt this question 3 more times for credit. Financial analysts have estimated the returns on shares of the Woods Corporation and the overall market portfolio under two economic states nature as follows. For Woods the state dependent returns are -0.03 in recession, and 0.08 in an economic boom. For the market the state dependent returns are -0.04 in recession, and 0.08 in boom. The analyst estimates that the probability of a recession is 0.50 while the probability of an economic boom is 0.50. Calculate the beta of Woods. * State your answer in decimal form, working your analysis using at least four decimal places of accuracy. CHECK ANSWER
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