LG 5 P8-18 Graphical derivation of beta A firm wishes to estimate graphically the betas for twoassets, A and B. It has gathered the return data shown in the following table for themarket portfolio and for both assets over the last 10 years, 2006-2015.Year2006200720082009201020112012201320142015Market portfolio2-13-4-8161015Actual return813Asset A11%8-4301914181217Asset B16%11-103-33022291926a. On a set of "market return (x axis)-asset return (y axis)" axes, use the data givento draw the characteristic line for asset A and for asset B.b. Use the characteristic lines from part a to estimate the betas for assets A and B.c. Use the betas found in part b to comment on the relative risks of assets A and B.

Answered: Image /qna-images/answer/e5916d84-2b95-45cf-a1cb-a06c5db59f6f.jpg

Answered: LG 5 P8-18 Graphical derivation of beta…

Linear Algebra: A Modern Introduction

4th Edition

ISBN:9781285463247

Author:David Poole

Publisher:David Poole

Chapter4: Eigenvalues And Eigenvectors

Section4.6: Applications And The Perron-frobenius Theorem

Problem 22EQ

See similar textbooks

Similar questions

Olympic Pole Vault The graph in Figure 7 indicates that in recent years the winning Olympic men’s pole vault height has fallen below the value predicted by the regression line in Example 2. This might have occurred because when the pole vault was a new event there was much room for improvement in vaulters’ performances, whereas now even the best training can produce only incremental advances. Let’s see whether concentrating on more recent results gives a better predictor of future records. (a) Use the data in Table 2 (page 176) to complete the table of winning pole vault heights shown in the margin. (Note that we are using x=0 to correspond to the year 1972, where this restricted data set begins.) (b) Find the regression line for the data in part ‚(a). (c) Plot the data and the regression line on the same axes. Does the regression line seem to provide a good model for the data? (d) What does the regression line predict as the winning pole vault height for the 2012 Olympics? Compare this predicted value to the actual 2012 winning height of 5.97 m, as described on page 177. Has this new regression line provided a better prediction than the line in Example 2?
What does the y -intercept on the graph of a logistic equation correspond to for a population modeled by that equation?
Table 6 shows the year and the number ofpeople unemployed in a particular city for several years. Determine whether the trend appears linear. If so, and assuming the trend continues, in what year will the number of unemployed reach 5 people?
The US. import of wine (in hectoliters) for several years is given in Table 5. Determine whether the trend appearslinear. Ifso, and assuming the trend continues, in what year will imports exceed 12,000 hectoliters?
The following table contains yearly data on the price of beef from 2022 to 2024: Year Price of Beef ($/Kg) 3 5 8 2022 2023 2024 Forecast the price of chicken for 2025 using the following methods: 1. A 3-Year moving average method; 2. A simple exponential smoothing method (use a=0.5); 8. A simple linear trend model.
A statistical program is recommended. A sample containing years to maturity and yield (9%) for 40 corporate bonds is contained in the data file named CorporateBonds.t (a) Develop a scatter diagram of the data using x = years to maturity as the independent variable. 10 10 10- 10- 9 9- 9. 8- 7+ 7- 6 6. 4. 3 2 2 1- .. 10 15 20 25 30 35 10 15 20 25 30 35 10 15 20 25 30 35 5 10 15 20 25 30 35 Years to Maturity Years to Maturity Years to Maturity Years to Maturity Does a simple linear regression model appear to be appropriate? O Given the downward trend of the data on the left side of the plot, a linear regression model would predict lower values for the data on the right side of the plot. So, a curvilinear regression model appears to be more appropriate. O Given the upward trend of the data on the left side of the plot, a linear regression model would predict higher values for the data on the right side of the plot. So, a curvilinear regression model appears to be more appropriate. O Since…
2
Scenario: You conduct research to assess the extent to which regulatory reports are late (in days). As potential contributors to late reports you want to simultaneously investigate company site (MN, CA, NY, TX), reporting agency (Agencies 1, 2, and 3), and report format (Long form, Short form) . What research analysis would be most appropriate? Group of answer choices a. ANOVA b. Binary Logistic Regression c. Chi-square Contingency Table d. Non-parametric e. Regression
Question 2 The following data relates to Company 2's share prices and the relevant market indices. Period Company 2' share prices Market indices Dec-22 1.23 234 Nov-22 1.15 225 Oct-22 1.12 222 Sep-22 0.98 216 Aug-22 1.24 226 Jul-22 1.36 230 Jun-22 1.29 228 May-22 1.25 217 Apr-22 1.17 206 Mar-22 1.2 207 Feb-22 1.15 217 Jan-22 1.19 213 Required Estimate the beta for Company 2 using the data above. You may use the data provided and run an OLS regression on Excel. If you do this, you must explain the steps that you take to apply the data to the regression and provide the regression output in your answer. Alternatively, you may use the covariance-variance method to estimate the beta value. If you do this, you must provide the full workings for each step.
Sara Jenkins notices that sales of several items that her company manufactures have shown a stable increase over the past few years, regardless of the time of year or state of the economy. What is this pattern for sales of those items over time called? Multiple Choice A trend Seasonal variation Cyclical variation Irregular component
You are considering the relationship between annual returns on the S&P 500 index (January 31 to January 31) and annual changes in the unemployment rate. You define:S = annual % change in the S&P500 (SPX)U = annual % change in the unemployment rateYou consider the following univariate relationship:Si = b0 + b1Ui + εiYou have data on annual changes in the unemployment rate and the S&P500 (SPX) from 2002 through 2020 (19 observations) and you want to use the data to estimate the regression coefficients (intercept b0 and slope b1)You are given the following statistics: Statistic Value Cov(U,S) -0.025043 Var(U) 0.034590 E(U) -0.001530 E(S) 0.064267 TSS 0.627907 RSS 0.326368 Compute the estimated coefficients for the intercept (b0) and slope (b1) and the R2 So far in 2021, the unemployment rate has decreased by 24% (from 6.3 percent to 4.8 percent). If the unemployment rate holds steady until the end of the year, resulting in an…
A Logistic Regression model was used for classifying common brushtail possums into their two regions. The outcome variable takes value 1 if the possum was from Victoria and 0 otherwise. We consider five predictors: sex_male (an indicator for a possum being male), head length, skull width, total length, and tail length. A summary table is provided below. Estimate Std. Error Z value Pr(>||I) (Intercept) 33.5095 9.9053 3.38 0.0007 sex_male -1.4207 0.6457 -2.20 0.0278 0.0231 skull_width total_length tail_length -0.2787 0.1226 -2.27 0.5687 0.1322 4.30 0.0000 -1.8057 0.3599 -5.02 0.0000 Suppose we see a brushtail possum at a zoo in the US, and a sign says the possum had been captured in the wild in Australia, but it doesn't say which part of Australia. However, the sign does indicate that the possum is female, its skull is about 53 mm wide, its total length is 93 cm and its tail is 40 cm long. What is the predicted probability that this possum is from Victoria? Choose an option that is…

SEE MORE QUESTIONS

Recommended textbooks for you

Linear Algebra: A Modern Introduction

Algebra

ISBN:

9781285463247

Author:

David Poole

Publisher:

Cengage Learning

College Algebra

Algebra

ISBN:

9781938168383

Author:

Jay Abramson

Publisher:

OpenStax

Glencoe Algebra 1, Student Edition, 9780079039897…

Algebra

ISBN:

9780079039897

Author:

Carter

Publisher:

McGraw Hill

Linear Algebra: A Modern Introduction

Algebra

ISBN:

9781285463247

Author:

David Poole

Publisher:

Cengage Learning

College Algebra

Algebra

ISBN:

9781938168383

Author:

Jay Abramson

Publisher:

OpenStax

Glencoe Algebra 1, Student Edition, 9780079039897…

Algebra

ISBN:

9780079039897

Author:

Carter

Publisher:

McGraw Hill

College Algebra

Algebra

ISBN:

9781305115545

Author:

James Stewart, Lothar Redlin, Saleem Watson

Publisher:

Cengage Learning

Big Ideas Math A Bridge To Success Algebra 1: Stu…

Algebra

ISBN:

9781680331141

Author:

HOUGHTON MIFFLIN HARCOURT

Publisher:

Houghton Mifflin Harcourt

Algebra and Trigonometry (MindTap Course List)

Algebra

ISBN:

9781305071742

Author:

James Stewart, Lothar Redlin, Saleem Watson

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS