Prices of S&P 500 and Facebook stock are given below. One-year T-bill rate is 0.14%...
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Prices of S&P 500 and Facebook stock are given below. One-year T-bill rate is 0.14% on Jan 2021, and the expected market portfolio return is 12%. Answer the following questions.
Date
S&P 500 Index
FB Stock Price
Dec-19
3,230.78
205.25
Jan-20
3,225.52
201.91
Feb-20
2,954.22
192.47
Mar-20
2,584.59
166.80
Apr-20
2,912.43
204.71
May-20
3,044.31
225.09
Jun-20
3,100.29
227.07
Jul-20
3,271.12
253.67
Aug-20
3,500.31
293.20
Sep-20
3,363.00
261.90
Oct-20
3,269.96
263.11
Nov-20
3,621.63
276.97
Dec-20
3,756.07
273.16
Jan-21
3,714.24
258.33
What is the beta of FB stock based on the monthly returns from Jan 2020 to Jan 2021? (Round to two decimals, e.g., 1.11)
According to CAPM, what is the expected return of FB stock at Jan 2021? (two decimals, e.g., write 11.11 if 11.11%) %
Suppose you want to form a portfolio between FB stock and one-year T-bill, and the target expected return for the portfolio is 10%. What is the portfolio weight on FB stock? (two decimals, e.g., write 11.11 if 11.11%) %
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