You are attempting to predict the return on Dog Heavy Equipment. You have gathered the following...

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Finance

You are attempting to predict the return on Dog Heavy Equipment.You have gathered the following data on the firm’s returns,relevant Treasury rates (for a risk-free rate), and the S&P1500 (which you plan to use as a market portfolio):
Year Dog Treasury S & P 500
1 12% 2% 14%
2 7% 2% 8%
3 14% 1% 9%
4 8% 1% 12%
5 4% 1% 7%
6 12% 0% 9%
7 9% 0% 10%
8 1% 1% 12%
9 -10% 1% 15%
10 25% 2% 11%
(i) Assume you believe that CAPM is the correct pricing model.Estimate the abnor- mal return on this stock and its beta. Shouldyou invest in this security?
(ii) Do Dog’s returns provide evidence for or against a weakform efficient market?

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You are attempting to predict the return on Dog Heavy Equipment.You have gathered the following data on the firm’s returns,relevant Treasury rates (for a risk-free rate), and the S&P1500 (which you plan to use as a market portfolio):YearDogTreasuryS & P 500112%2%14%27%2%8%314%1%9%48%1%12%54%1%7%612%0%9%79%0%10%81%1%12%9-10%1%15%1025%2%11%(i) Assume you believe that CAPM is the correct pricing model.Estimate the abnor- mal return on this stock and its beta. Shouldyou invest in this security?(ii) Do Dog’s returns provide evidence for or against a weakform efficient market?

Year	Dog	Treasury	S & P 500
1	12%	2%	14%
2	7%	2%	8%
3	14%	1%	9%
4	8%	1%	12%
5	4%	1%	7%
6	12%	0%	9%
7	9%	0%	10%
8	1%	1%	12%
9	-10%	1%	15%
10	25%	2%	11%