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Using CAPM, find the equity betas
Based on CAPM and using the returns on the market portfolio and the risk-free rates, estimate the equity betas for the two companies A and B.
If I keep it simple and use only three months,
so return for A are:
-10.91%
6.52%
-3.74%
returns for B are:
1.13%
3.85%
10.11%
S&P 500 returns:
7.04%
4.99%
0.91%
and risk free rate is:
0.43%
0.39%
0.39%
I know I need to use the CAPM formula but I don't whether to average everything, or calculate the equity betas one by one and then average that, it's baffling |
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