Question: Using Yahoo Finance, find 5 companies, their risk (beta), and return (for past month / past year). Would you recommend buying the stocks?
I think that I need to use the following formula: Expected Return = risk free rate + beta (return on market - risk free rate).
For risk-free rate, should I use current yield for a 10-year T-bond, which is 1.88%, I believe? How do I calculate market risk premium? Should I export history data to Excel and take average price for each month/year period? Edit
TutorTeddy.com & Boston Predictive Analytics
[ Email your Statistics or Math problems to firstname.lastname@example.org (camera phone photos are OK) ]
Boston Office (Near MIT/Kendall 'T'):
Cambridge Innovation Center,
One Broadway, 14th Floor,
Cambridge, MA 02142,
Dallas Office (Near Galleria):
15950 Dallas Parkway,
Dallas, TX 75248,