help with betas -- FinanceProfessor Current classes

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Date Posted: 20:44:29 04/24/02 Wed
Author: jimmahar
Subject: help with betas

a student (who will remain anonymous) emalied me the following and since I have had several students ask me the same, I htought I would share the response with the class:

> hi (again) dr. mahar...
> i am having a little trouble with my betas. I did
> the regressions and then
> went to finance.yahoo.com to check their (SIC) accuracy.
> and they are way off.
> Also, all my stocks except microsoft (who i did get
> to work out to about 1.8
> like it is) are negative and decimals....any
> thoughts?

I really do not know what would cause that but at least two others have had a similar problem...I'd have a few quesses...

One possible cause is that the returns are messed up...remember it is (this month's close - last month's close)/last month's close...

since the dates go backwards in Yahoo, some are messing up this way.

The other problem seems to be an Excel problem, but I am not sure...

It SEEMS to be if you run the regression on formulas...that is if your return column is made of formulas...the way to fix this is to copy the column and paste it as values (paste special-values) and then run the regression on the value column...I am not sure why or even if this is casuing the problem but for the student that came in today with the exact problem, this method worked.

hope this helps.

jim

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