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OA Graphical derivation of beta A firm wishes to estimate graphically the betas for two assets, A and B. It has gathered the return data shown in the following table for the market portfolio and for both assets over the last 10 years, 2009-2018: a. Which of the following graphs represents the graphical derivation of beta for assets A and 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. a. Which of the following graphs represents the graphical derivation of beta for assets A and B? (Select the best answer below.) Asset Return (% Beta Derivation 20 15 20-150 540 15 20 -10- --15- Asset A Asset B 20 OC. Market Retum (%) Beta Derivation 20- 15 Asset Return (%) 10- 15 20 5 -10 -15 G -20 Asset A Asset B Market Return (%) b. Using the characteristic lines from part a, which of the following pairs of data represents the beta estimates for assets A and B? (Select the best answer below.) OA. (-1.089,-0.719) OB. (-1.089,0.719) OC. (1.089,0.719) OD. (1.089,-0.719) c. Using the belas found in part b, which asset is more risky? (Select the best answer below.) OA. Asset A B. Asset B COD. OB. Beta Derivation 20 15- Asset Return (%) Asset Return (%) 10- 54 -20-15 5 5 10 15 20 5 -10- -15 Asset A Asset B -20 Market Return (%) Beta Derivation 20 15- 10- -20-15 10 S 5 Q 15 20 -5 -10- -15- Asset A -Asset B -20- Market Return (%)

OA Graphical derivation of beta A firm wishes to estimate graphically the betas for two assets, A and B. It has gathered the return data shown in the following table for the market portfolio and for both assets over the last 10 years, 2009-2018: a. Which of the following graphs represents the graphical derivation of beta for assets A and 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. a. Which of the following graphs represents the graphical derivation of beta for assets A and B? (Select the best answer below.) Asset Return (% Beta Derivation 20 15 20-150 540 15 20 -10- --15- Asset A Asset B 20 OC. Market Retum (%) Beta Derivation 20- 15 Asset Return (%) 10- 15 20 5 -10 -15 G -20 Asset A Asset B Market Return (%) b. Using the characteristic lines from part a, which of the following pairs of data represents the beta estimates for assets A and B? (Select the best answer below.) OA. (-1.089,-0.719) OB. (-1.089,0.719) OC. (1.089,0.719) OD. (1.089,-0.719) c. Using the belas found in part b, which asset is more risky? (Select the best answer below.) OA. Asset A B. Asset B COD. OB. Beta Derivation 20 15- Asset Return (%) Asset Return (%) 10- 54 -20-15 5 5 10 15 20 5 -10- -15 Asset A Asset B -20 Market Return (%) Beta Derivation 20 15- 10- -20-15 10 S 5 Q 15 20 -5 -10- -15- Asset A -Asset B -20- Market Return (%)

Financial Management: Theory & Practice
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter25: Portfolio Theory And Asset Pricing Models
Section: Chapter Questions
Problem 4P
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OA Graphical derivation of beta A firm wishes to estimate graphically the betas for two assets, A and B. It has gathered the return data shown in the following table for the market portfolio and for both assets over the last 10 years, 2009-2018: a. Which of the following graphs represents the graphical derivation of beta for assets A and 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. a. Which of the following graphs represents the graphical derivation of beta for assets A and B? (Select the best answer below.) Asset Return (% Beta Derivation 20 15 20-150 540 15 20 -10- --15- Asset A Asset B 20 OC. Market Retum (%) Beta Derivation 20- 15 Asset Return (%) 10- 15 20 5 -10 -15 G -20 Asset A Asset B Market Return (%) b. Using the characteristic lines from part a, which of the following pairs of data represents the beta estimates for assets A and B? (Select the best answer below.) OA. (-1.089,-0.719) OB. (-1.089,0.719) OC. (1.089,0.719) OD. (1.089,-0.719) c. Using the belas found in part b, which asset is more risky? (Select the best answer below.) OA. Asset A B. Asset B COD. OB. Beta Derivation 20 15- Asset Return (%) Asset Return (%) 10- 54 -20-15 5 5 10 15 20 5 -10- -15 Asset A Asset B -20 Market Return (%) Beta Derivation 20 15- 10- -20-15 10 S 5 Q 15 20 -5 -10- -15- Asset A -Asset B -20- Market Return (%)
Transcribed Image Text:OA Graphical derivation of beta A firm wishes to estimate graphically the betas for two assets, A and B. It has gathered the return data shown in the following table for the market portfolio and for both assets over the last 10 years, 2009-2018: a. Which of the following graphs represents the graphical derivation of beta for assets A and 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. a. Which of the following graphs represents the graphical derivation of beta for assets A and B? (Select the best answer below.) Asset Return (% Beta Derivation 20 15 20-150 540 15 20 -10- --15- Asset A Asset B 20 OC. Market Retum (%) Beta Derivation 20- 15 Asset Return (%) 10- 15 20 5 -10 -15 G -20 Asset A Asset B Market Return (%) b. Using the characteristic lines from part a, which of the following pairs of data represents the beta estimates for assets A and B? (Select the best answer below.) OA. (-1.089,-0.719) OB. (-1.089,0.719) OC. (1.089,0.719) OD. (1.089,-0.719) c. Using the belas found in part b, which asset is more risky? (Select the best answer below.) OA. Asset A B. Asset B COD. OB. Beta Derivation 20 15- Asset Return (%) Asset Return (%) 10- 54 -20-15 5 5 10 15 20 5 -10- -15 Asset A Asset B -20 Market Return (%) Beta Derivation 20 15- 10- -20-15 10 S 5 Q 15 20 -5 -10- -15- Asset A -Asset B -20- Market Return (%)
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