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Estimate the beta of Amazon

Estimate the beta of Amazon.

I need help with a Excel question. All explanations and answers will be used to help me learn.

Estimate the beta of Amazon

  1. Use Yahoo Finance, download Amazon’s historical monthly stock prices for the last 10 years (Time period 1/1/2010 – 12/31/2019) and calculate holding period returns every month. Holding period return = (Ending price / Beginning price) – 1
  2. Use Yahoo Finance, download S&P 500 historical monthly prices for the past 10 years (Time period 1/1/2010 – 12/31/2019) and calculate holding period returns every month. Holding period return = (Ending price / Beginning price) – 1
  3. Use 1.5% as annual risk-free rate during these periods.
  4. Run a regression. Y variable is Amazon holding period return minus risk-free rate. X variable is S&P 500 holding period return minus risk-free rate.

Show the regression summary result, the coefficient will be a rough estimate of Amazon’s beta. Please use the rubric below to guide the development of your assignment.

Submit the assignment in a new Excel file.

Estimate the beta of Amazon