) and find the three-month Treasury bill secondary market rate. Download this file.

· Step 1: Calculate the monthly returns, average monthly returns, and standard deviations for your company’s stock, the 3-month Treasury Bill, and the S&P 500 for this period.

· Step 2: Beta is often estimated by linear regression. A model is commonly used is called the market model, which is:

(Ri – Rf) = alpha + beta*(Rm – Rf) + error term

In this regression, Ri is the return on the stock and Rf is the risk-free rate for the same period. Rm is the return on a stock market index such as the S&P 500 index. Alpha is the regression intercept, and Beta is the slope. Please estimate Beta and plot the SML by following the example

Please note extra credit will be assigned only if your calculation is correct. If your calculation is incorrect, you will no extra credit.