You hear on the news that the S&P 500 was down 2.1% today relative to the risk-free rate (the market's excess return was -2.1%). You are thinking about your portfolio and your investments in Zynga and Proctor and Gamble. a. If Zynga's beta is 1.3, what is your best guess as to Zynga's excess return today? b. If Proctor and Gamble's beta is 0.4, what is your best guess as to P&G's excess return today? a. If Zynga's beta is 1.3, what is Zynga's excess return today is your best guess as to Zynga's excess return today? % (Round to one decimal place.)

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter6: Risk And Return
Section: Chapter Questions
Problem 14P
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You hear on the news that the S&P 500 was down 2.1% today relative to the risk-free rate (the market's excess return was -2.1%). You are thinking about your portfolio and your investments in
Zynga and Proctor and Gamble.
a. If Zynga's beta is 1.3, what is your best guess as to Zynga's excess return today?
b. If Proctor and Gamble's beta is 0.4, what is your best guess as to P&G's excess return today?
a. If Zynga's beta is 1.3, what is your best guess as to Zynga's excess return today?
Zynga's excess return today is%. (Round to one decimal place.)
COTTE
Transcribed Image Text:You hear on the news that the S&P 500 was down 2.1% today relative to the risk-free rate (the market's excess return was -2.1%). You are thinking about your portfolio and your investments in Zynga and Proctor and Gamble. a. If Zynga's beta is 1.3, what is your best guess as to Zynga's excess return today? b. If Proctor and Gamble's beta is 0.4, what is your best guess as to P&G's excess return today? a. If Zynga's beta is 1.3, what is your best guess as to Zynga's excess return today? Zynga's excess return today is%. (Round to one decimal place.) COTTE
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