Purchase Solution

Finance: Capital market analysis.

Not what you're looking for?

Ask Custom Question

Please utilize the attach Excel file to respond to the following questions.
A . Create an XY (scatter) plot to show the relationship between the returns on AT&T and the S&P 500. Describe, in words, the relationship between the returns of AT&T and the S&P 500. Estimate the slope of a regression equation of this data. Repeat for Contrafund.
B. Add a linear trend line to the chart, and place the equation and R² on the chart. Does this equation confirm your guess from part a? How much of the variability in AT&T returns can be explained by variability in the broad market? Repeat for Contrafund.
C. Using the analysis ToolPak add-in, run a regression analysis on this data. Your dependent variable is the AT&T returns, and the independent variable is the S&P 500 returns. Does this confirm the earlier results? The Slope coefficient is AT&T's beta. Is the beta of this stock statistically significant? Explain
D. Repeat part c using the returns on Contrafund and the S&P 500. Compare the R² from both regressions. What conclusions can you draw from the difference?

Date S&P 500 AT&T Fidelity Contrafund
Sep-03 2.43% 6.63% 6.51%
Oct-03 1.09% -2.92% 1.83%
Nov-03 4.54% 11.98% 2.66%
Dec-03 1.98% -2.19% -0.05%
Jan-04 1.36% -5.84% 3.21%
Feb-04 -1.67% 2.21% 0.57%
Mar-04 -1.89% 1.47% -1.45%
Apr-04 1.71% -4.82% 1.64%
May-04 1.48% 2.32% 2.19%
Jun-04 -3.22% 4.49% -4.49%
Jul-04 0.24% 1.78% -0.17%
Aug-04 0.59% 0.62% 4.22%
Sep-04 1.29% -2.66% 0.87%
Oct-04 4.14% -0.36% 5.31%
Nov-04 2.53% 2.38% 2.66%
Dec-04 -2.24% -7.80% -1.35%
Jan-05 2.09% 1.26% 3.02%
Feb-05 -2.21% -1.54% -1.29%
Mar-05 -1.87% 0.46% -3.23%
Apr-05 3.22% -1.76% 4.60%
May-05 -0.25% 1.58% 1.73%
Jun-05 3.83% 2.95% 4.42%
Jul-05 -0.94% -1.51% 0.86%
Aug-05 0.38% -0.46% 2.92%
Sep-05 -2.37% -0.50% -1.61%
Oct-05 4.40% 4.44% 4.09%
Nov-05 -0.72% -1.69% 1.35%
Dec-05 2.40% 5.96% 5.59%
Jan-06 0.57% 6.32% -2.80%
Feb-06 1.25% -1.99% 2.05%
Mar-06 1.26% -3.07% 2.47%
Apr-06 -3.01% -0.57% -3.90%
May-06 -0.18% 7.02% 0.77%
Jun-06 0.45% 7.53% -1.39%
Jul-06 2.18% 3.80% 1.12%
Aug-06 2.25% 4.59% 1.09%
Sep-06 3.15% 5.19% 3.61%
Oct-06 1.99% -0.99% 2.65%
Nov-06 0.78% 5.43% 0.03%
Dec-06 1.50% 5.26% 2.17%
Jan-07 -1.96% -2.21% -2.09%
Feb-07 0.76% 7.15% 1.39%
Mar-07 4.43% -1.80% 3.49%
Apr-07 3.39% 6.77% 4.10%
May-07 -1.88% 0.39% -0.21%
Jun-07 -3.13% -5.64% -0.85%
Jul-07 1.28% 1.81% 1.84%
Aug-07 3.38% 6.12% 6.12%
Sep-07 1.36% -1.23% 5.02%
Oct-07 -3.87% -8.57% -2.73%
Nov-07 -1.65% 8.77% 0.40%
Dec-07 -6.05% -7.39% -9.51%
Jan-08 -2.58% -9.51% -0.32%
Feb-08 -1.38% 9.96% -1.56%
Mar-08 4.77% 1.07% 5.31%
Apr-08 1.51% 3.07% 3.30%
May-08 -8.81% -15.56% -4.91%
Jun-08 -0.90% -8.55% -4.14%
Jul-08 1.55% 3.83% -0.77%
Aug-08 -9.94% -12.72% -9.62%

Purchase this Solution

Solution Summary

The problem deals with creating a scatter plot, R-squared of returns for two companies.

Solution provided by:
Education
  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
Recent Feedback
  • "Thank you."
  • "thank you Chidi Ngene.. if you have any APA references would be great"
  • "Thank you so much for your help, your explanations were easy to understand and apply!"
  • "are you able to highlight the equations used either on the xlsx or a word doc as to how each graph was formed- overall looks fine i just need help understanding this myself"
  • "Chidi Ngene, M. Sc. Was extremely helpful as without the help and guidance I would have failed, but with the help I passed. I still have a lot to learn and in need of the guidance to understand and learn more on the subject. I would recommend Chidi Ngene and BrainMass to anyone that are in need of help. Thank you!!"
Purchase this Solution


Free BrainMass Quizzes
Measures of Central Tendency

Tests knowledge of the three main measures of central tendency, including some simple calculation questions.

Know Your Statistical Concepts

Each question is a choice-summary multiple choice question that presents you with a statistical concept and then 4 numbered statements. You must decide which (if any) of the numbered statements is/are true as they relate to the statistical concept.

Terms and Definitions for Statistics

This quiz covers basic terms and definitions of statistics.

Measures of Central Tendency

This quiz evaluates the students understanding of the measures of central tendency seen in statistics. This quiz is specifically designed to incorporate the measures of central tendency as they relate to psychological research.