Type the Excel formula for a share’s beta when its five annual returns are in B2:B6 and the market index’s returns for the same years are in C2:C6.
Type the Excel formula for a share’s beta when its five annual returns are in B2:B6 and the market index’s returns for the same years are in C2:C6.
Answer
=SLOPE(B2:B6,C2:C6)
1.7077 for Lakehead. known_y (the stock) first, known_x (the market) second; equivalent to =COVARIANCE.S(B2:B6,C2:C6)/VAR.S(C2:C6).
OpenStax Principles of Finance §15.3 — SLOPE and the CAPM, reference only; Bigel, Introduction to Financial Analysis (CC BY 4.0) §13.2 and §14.13 — RF + premium, shape only; the GoC T-bill as risk-free proxy is the course’s stated convention (verified-facts §2.10 K11); original company and figures