data Analytics

The file Delldata.xlsx (available on the companion website) containsmonthly returns for the Standard & Poor’s stock index and for Dell stock.The beta of a stock is defi ned as the slope of the least-squares line used topredict the monthly return for a stock from the monthly return for the market.Use this fi le to perform the following exercises:a. Estimate the beta of Dell.b. Interpret the meaning of Dell’s beta.c. If you believe a recession is coming, would you rather invest in a highbetaor low-beta stock?d. During a month in which the market goes up 5 percent, you are 95percent sure that Dell’s stock price will increase between which rangeof values?

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