You hear on the news that the S&P 500 was down 2.0 % today relative to the risk-free rate (the market's excess return was negative 2.0 % ). You are thinking about your portfolio and your investments in Zynga and Proctor and Gamble. a. If Zynga beta is 1.3, what is your best guess as to Zynga's excess return today?
b. If Proctor and Gamble beta is 0.4, What is your best guess as to P&G excess return today?

a) -2.6%

b) -2.8%

Explanation:

a) If Zynga beta is 1.3, the best guess as to Zynga's excess return today will be:

Zynga beta * Market Excess return =

-2% * 1.3 = -2.6%

Therefore, the best guess as to Zynga's excess return today if Zynga beta is 1.3 is -2.6%

b) If Proctor and Gamble beta is 0.4, the best guess as to P&G excess return today will be:

Proctor and Gamble beta * Excess market return =

-2% * 0.4 = -2.8%

Therefore, if Proctor and Gamble beta is 0.4, the best guess as to P&G excess return today is -2.8%

answer; common market;

the answer would be voluntary exchange -

"the act of buyers and sellers freely and willingly engaging in market transactions. moreover, transactions are made in such a way that both the buyer and the seller are better off after the exchange than before it occurred."

hope this : )

-shy