Statement

Research organizations that rate companies on a specific facet of social responsibility. How do they assess the companies they rate? How do the vision and mission statements of the rating organization affect how they view social responsibility? How do the vision and mission statement influence the assessment tools used? Cite your sources.

Expert Answers

E8-6 a) Calculate the required rate of return for an asset that has a beta of 1.8, given a risk-free rate of 5% and a market return of 10%.
b) If investors have become more risk-averse due to recent geopolitical events, and the market return rises to 13%, what is the required rate of return for the same asset?”
c) Use your findings in part a) to graph the initial security market line (SML), and then use your findings in part b to graph (on the same set of axes) the shift in the SML.

Terms

Consider the topic you selected for your research paper. What key terms could you use to search for related information?

Analysis

When performing a regression analysis, it is important to first identify your independent/predictor variable versus your dependent/response variable, or simply put, your x versus y variables. How do you decide which variable is your predictor variable and which is your response variable?
Based on the Body Fat Versus Weight data set, which variable is the predictor variable? Which variable is the response variable? Explain.
Using Excel, construct a scatter plot of your data.
Using the graph and intuition, determine whether there is a positive correlation, a negative correlation, or no correlation. How did you come to this conclusion?
Calculate the correlation coefficient, r, and verify your conclusion with your scatter plot. What does the correlation coefficient determine?
Does the line appear to be a good fit for the data? Why or why not?
Regression equations help you make predictions. Using your regression equation, discuss what the slope means, and determine the predicted value of body fat (y) when weight (x) equals 0. Interpret the meaning of this equation.