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Date HVN ASX 200 ASXall Date 2.4796 0.27% 0.04% Jan-19 Apr-20 Mar-20 Feb-20 -2.2196 -2.88% Dec-18 -2.69% -3.89% -1.31% -1.87% Nov-18 Jan-20 11.07% 5.62% 7.36% Oct-18 Dec-19 21496 0.99% 0.43% Nov-19 1.1996 2.81% 2.17% Sep-18 Aug-18 Jul-18 Oct-19 11.679 2.22% 3.57% 0.1696 1.93% 1.05% Sep-19 Aug-19 Jul-19 HVN ASX 200 ASXall Date HVN ASX 200 ASXall 4.04% 1.79% 3.13% Oct 17 18.93% 8.30 938% 3.82% 1.82% 2.27% Sep-17 237% -2.64% 4.00% 0.57% 3.42% 2.59% Aug-17 -6.81% -6.26 -6.15% 4.0396 -1.94% -2.319 Jul-17 5.78% 1.97% 2849 0.879 -0.12% 1.89% Jun-17 5.17% -2.10% -1.64% 1.38% -0.12% 0.99% May-17 -3.66% 1.05% 260% 10.77% 3.56% 6.60% Apr-17 19.63% 0.85% 0.8396 -2.78% 0.09% -2.13% Mar-17 -6.61% -1.74% -1.26% 6.28% 1.53% 3.6296 Feb-17 8.54% 5.49% 7.0896 -9.70% 0.27% -1.94% Jan-17 -13.02% -3.10% -2.13% 9.33% 6.60% 6.84% Dec-16 -2.23% -0.42% -1.16% -7.64% -0.41% -1.21% Nov-16 1.83% 2.45% 3.47% -0.70% -5.07% -7.86% Oct-16 1.2796 2.32% 3.06% 2.77% -1.75% -1.98% Sep-16 2.6896 -1.55% -1.90% 3.25% 0.05% 1.09% Aug-16 5.26% 3.77% 4.82% 2.85% 0.05% Jun-18 May-18 Apr-18 1.2796 3.3896 5.4796 1.93% -0.7496 0.4896 -0.94% Mar-18 Jun-19 May-19 Apr-19 2.0296 1.16% 2.50% Feb-18 3.95% 0.9196 2.3096 Jan-18 Mar-19 3.56% -0.049 1.4896 Dec-17 Feb-19 -1.049 3.72% 3.75% Nov-17 Q1.1 What is Harvey Norman's systematic risk using the monthly returns? (You may use the ASXall Index as the proxy of the market portfolio). What is Harvey Norman's systematic risk using the ASX200 Index as the market proxy? Why might the two risk estimates be different and what information does beta provide to investors? You note that the co-variance of the stock return with the ASX 200 is 0.001142 and the co-variance of the stock return with the ASXall Index is 0.00143. You also note that the variance of the ASX 200 Index is 0.000827 and the variance of the ASX Index is 0.001213. [10 marks]

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