Explore BrainMass

How do I calculate beta compared to a liquidity factor?

I am trying to figure out how to calculate beta (sensitivity) of the monthly return compared to the liquidity factor.



Solution Preview

The dependent variable is monthly returns. The independent variable is liquidity factor. Run simple linear regression
Monthly returns = b0+b1*liquidity factor
The slope coeffcient or b1 is the beta value you are looking for.

You can use Excel to run the regerssion. GO to ...