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You hear on the news that the? S&P 500 was down 2.1% today relative to the?...

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Finance

You hear on the news that the? S&P 500 was down 2.1% todayrelative to the? risk-free rate? (the market's excess return was -2.1 %) . You are thinking about your portfolio and your investmentsin Zynga and Proctor and Gamble.

a. If? Zynga's beta is 1.1?, what is your bestguess as to? Zynga's excess return? today? (round to one decimalplace)

b. If Proctor and? Gamble's beta is 0.4?, whatis your best guess as to? P&G's excess return? today? (round toone decimal place)

Answer & Explanation Solved by verified expert
3.8 Ratings (583 Votes)
a According to question since SP is proxy for the market and it was down 21 relative to risk free rate hence market excess return Return of SP 500 risk free rate 21 Beta of Zynga 11 Zyngas excess return Expected return of    See Answer
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Transcribed Image Text

You hear on the news that the? S&P 500 was down 2.1% todayrelative to the? risk-free rate? (the market's excess return was -2.1 %) . You are thinking about your portfolio and your investmentsin Zynga and Proctor and Gamble.a. If? Zynga's beta is 1.1?, what is your bestguess as to? Zynga's excess return? today? (round to one decimalplace)b. If Proctor and? Gamble's beta is 0.4?, whatis your best guess as to? P&G's excess return? today? (round toone decimal place)

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