find out Microsoft’s alpha, beta, and the fraction of its variance attributed to market risk. ### Financial Data TableThis table presents a set of financial data, possibly representing returns. The columns are labeled as follows:- **r_f**: Represents the risk-free rate or return.- **r_M**: Market return or the return of a market index.- **R_M**: Excess market return. This could be the market return minus the risk-free rate. It is highlighted in red, indicating its significance.- **r_IBM**: Return of IBM's stock.- **R_IBM**: Excess return of IBM's stock. This could be IBM’s stock return minus the risk-free rate. It is highlighted in red.- **r_MSFT**: Return of MSFT's stock.- **R_MSFT**: Excess return of MSFT's stock. Similar to IBM, this is highlighted in red and could denote the MSFT stock return minus the risk-free rate.### Observations- Each column contains numerical values, presumably short-term returns, possibly daily or weekly.- The data presents positive and negative values, reflecting returns that fluctuate over time.- The highlighted columns (R_M, R_IBM, R_MSFT) might be used to assess how individual stocks and the market as a whole perform above or below the risk-free rate.### PurposeThis table can be used for educational purposes to:- Understand the calculation of excess returns.- Analyze and interpret financial returns data.- Compare between market, individual stocks, and excess returns to assess performance.### Applications- Suitable for finance-related courses focusing on investment and risk assessment.- Useful in quantitative analysis of financial markets.- Can serve as a reference for case studies on stock performance and risk measurement.

To find the required alpha and beta values, we need to fit a regression model between Microsoft's…

Answered: find out Microsoft’s alpha, beta, and…

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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