13 Jan

Re Calculate the variance of the market returns and the co-variance

by jagguarpaw On: Finance - 0 Comment

Question: Re Calculate the variance of the market returns and the co-variance

Re Calculate the variance of the market returns and the co-variance between the returns on the market and those of Anchovy Queen. Notes: 1) Beta is the ratio of the variance to the co-variance. 2) USE the yellow box instead of the Market return in the table.

(1)	(2)	(3)	(4)	(5)	(6)	(7)
						Product of
			Deviation	Deviation	Squared	Deviations
			From	From average	Deviation	From average
	Market	Anchovy Q	average	Anchovy Q	From average	Returns
Month	Return	Return	Market return	Return	Market return	(cols 4 x 5)
1	-8%	-11%	-10	-13	100	130
2	4	8	2	6	4	12
3	12	19	10	17	100	170
4	-6	-13	-8	-15	64	120
5	2	3	0	1	0	0
6	8	6	6	4	36	24
Average	2	2		Total	304	456
			Variance – σm2 – 304/6 – 50.67
			Covariance – σim  – 456/6 – 76
			Beta (β) – σim/ σm2 – 76/50.67 – 1.5
	Market return
	8.5
	5
	-6
	3
	8
	2

 

Tags: Re Calculate the variance, Re Calculate the variance of the market, Re Calculate the variance of the market returns, Re Calculate the variance of the market returns and, Re Calculate the variance of the market returns and the, Re Calculate the variance of the market returns and the co-variance Share

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