EXCEL Below is nine months" return data for Walgreens and the S&P 500.
- Estimate the intercept (alpha) and beta for Walgreens stock using spreadsheet functions.
- Interpret what the slope estimate means to a stock analyst.
- Compute the R-squared of the regression using Excel"s RSQ function. What does the R-squared tell us about the relation- ship between Walgreens" returns and those of the market?
|
MONTH
|
WALGREENS RETURN
|
S&P500 RETURN
|
|
1
|
2.0%
|
7.5%
|
|
2
|
- 5.9%
|
1.8%
|
|
3
|
0.2%
|
8.2%
|
|
4
|
2.0%
|
- 6.4%
|
|
5
|
-2.2%
|
-1.1%
|
|
6
|
- 14.3%
|
- 2.5%
|
|
7
|
-6.0%
|
0.5%
|
|
8
|
4.9%
|
7.7%
|
|
9
|
- 7.9%
|
- 6.4%
|