(This problem illustrates the computation of beta coefficients may be solved using a statistics program or Excel.) The returns on the market and stock A and stock B are as follows: 
Compute the beta coefficient for each stock and interpret the results of the computations.
Definitions:
Compounding Periods
The frequency with which interest is added to the principal balance of an investment, affecting the total interest earned.
Future Value
The value of an investment or a sum of money projected to grow over a specified period of time, often calculated using the interest rate.
Present Value
Present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return, used in time value of money calculations to compare investment options.
Amortized Loan
A loan with scheduled periodic payments that consist of both principal and interest, so the loan is paid off by the end of the term.
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