Calculating Beta Using Web Data and Excel

Calculating Beta Using Web Data and Excel - This workbook...

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This workbook demonstrates how to calculate betas from stock price histories downloaded from the Web (http://moneycentral.msn.com/investor in this case). Once the data is in the worksheet, it should be sorted from oldest to newest (this isn't strictly necessary, but it facilitates charting). Next, calculate the monthly returns from the prices (note that I am using only price returns, not including dividends, for simplicity) as shown in F7:H66. The beta calculations are shown in J7:L7. Note that I usually calculate the S&P 500 beta also as a check on the formula. It must always be equal to 1. Finally, I have also charted the characteristic lines for the securities using an XY Scatter chart. Your X axis data is the returns on the S&P 500. The Y axis data is the returns from the security. Recall that beta is the slope of this line. You can read it directly from the formula for the line in the chart.
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Historical stock prices provided by CSI, Inc. Historical mutual fund and industry prices provided by Media Ge Monthly prices (Aug 1999 to Aug 2004) DATE IBM
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This note was uploaded on 09/27/2011 for the course ECON 6000 taught by Professor Fayissa during the Spring '10 term at Middle Tennessee State University.

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Calculating Beta Using Web Data and Excel - This workbook...

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