To determine how each stock changes in response to an S&P 500 movement, we need the beta values for each stock (Savoy, Hokie, Alison, and Expo). The beta measures a stock's volatility relative to the S&P 500 index. Here’s how the calculations would proceed once beta values are provided:

Part a) Calculation

The formula for calculating the expected change in stock value based on the S&P 500's movement is:

\text{Expected Change in Stock Value} = \text{Beta} \times \text{Change in S&P 500}

where:

• Change in S&P 500 is 7.14%.

For instance, if the beta for Savoy is 1.2, then: $\text{Expected Change in Stock Value} = 1.2 \times 7.14\% = 8.57\%$

Could you provide the beta values for each stock, or are they provided in the data you mentioned? This will allow us to calculate the specific changes for each stock.

Let me know if you’d like a deeper breakdown of each calculation step. Here are some related questions for further understanding:

1. What does a beta of more than 1 imply about a stock's volatility compared to the S&P 500?
2. How would the expected stock change differ if the S&P 500 movement was negative?
3. If the beta of a stock were zero, how would its value change with market movements?
4. Can a negative beta influence stock behavior in the opposite direction of the market?
5. How would you compare the long-term risk of stocks with varying beta values?

Tip: A beta above 1 indicates higher volatility compared to the market, while below 1 suggests lower sensitivity to market movements.