A stock's beta coefficient can be calculated using the following equation: B₁ = Oi, m σε m a. Write a user-defined function that can calculate the beta coefficient. The argu- ments to the function should be the covariance between the stock and market returns, and the variance of the market's returns. For example, BETA (COVAR AS SINGLE, MARKET VAR AS SINGLE). b. Rewrite your function so that it accepts ranges of returns and then calcu- lates the beta directly from the returns. It should be defined as: BETA(STOCK- RETURNS AS RANGE, MARKETRETURNS AS RANGE). Your function should make use of Application. WorksheetFunction to calculate the covariance and variance (use Excel's COVAR.S and VAR.S functions). In the code, be sure to check to see if the number of stock returns is equal to the number of market returns. The function should return an error if the count of returns is not equal.
A stock's beta coefficient can be calculated using the following equation: B₁ = Oi, m σε m a. Write a user-defined function that can calculate the beta coefficient. The argu- ments to the function should be the covariance between the stock and market returns, and the variance of the market's returns. For example, BETA (COVAR AS SINGLE, MARKET VAR AS SINGLE). b. Rewrite your function so that it accepts ranges of returns and then calcu- lates the beta directly from the returns. It should be defined as: BETA(STOCK- RETURNS AS RANGE, MARKETRETURNS AS RANGE). Your function should make use of Application. WorksheetFunction to calculate the covariance and variance (use Excel's COVAR.S and VAR.S functions). In the code, be sure to check to see if the number of stock returns is equal to the number of market returns. The function should return an error if the count of returns is not equal.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 6P: The market and Stock J have the following probability distributions: a. Calculate the expected rates...
Related questions
Question
![A stock's beta coefficient can be calculated using the following equation:
B₁
=
Oi, m
σε
m
a. Write a user-defined function that can calculate the beta coefficient. The argu-
ments to the function should be the covariance between the stock and market
returns, and the variance of the market's returns. For example, BETA (COVAR AS
SINGLE, MARKET VAR AS SINGLE).
b. Rewrite your function so that it accepts ranges of returns and then calcu-
lates the beta directly from the returns. It should be defined as: BETA(STOCK-
RETURNS AS RANGE, MARKETRETURNS AS RANGE). Your function should make use
of Application. WorksheetFunction to calculate the covariance and variance
(use Excel's COVAR.S and VAR.S functions). In the code, be sure to check to
see if the number of stock returns is equal to the number of market returns.
The function should return an error if the count of returns is not equal.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6634fe12-7055-4a78-a606-b3a868a78e78%2F1dfe134e-102e-415b-b31b-f75d85b8c7da%2Fo5ueixwo_processed.png&w=3840&q=75)
Transcribed Image Text:A stock's beta coefficient can be calculated using the following equation:
B₁
=
Oi, m
σε
m
a. Write a user-defined function that can calculate the beta coefficient. The argu-
ments to the function should be the covariance between the stock and market
returns, and the variance of the market's returns. For example, BETA (COVAR AS
SINGLE, MARKET VAR AS SINGLE).
b. Rewrite your function so that it accepts ranges of returns and then calcu-
lates the beta directly from the returns. It should be defined as: BETA(STOCK-
RETURNS AS RANGE, MARKETRETURNS AS RANGE). Your function should make use
of Application. WorksheetFunction to calculate the covariance and variance
(use Excel's COVAR.S and VAR.S functions). In the code, be sure to check to
see if the number of stock returns is equal to the number of market returns.
The function should return an error if the count of returns is not equal.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning