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a. Download five years monthly closing prices for two companies of your choice and the S&P 500 Index (ticker = ^GSPC). Download the data into an Excel file. Use the adjustedclose prices, which adjust for dividend payments, to calculate the monthly rate of return for each price series. Use an XY scatter plot chart with no line joining the points to plot the company's returns against the S&P 500. Now select one of the data points, and right-click to obtain a shortcut menu allowing you to enter a trend line. This is the company's characteristic line, and the slope is the company's beta. Repeat this process for the second company. What conclusions can you draw from each company's characteristic line?

b. Following the procedures from part one, find five years of monthly returns for a different company of your choice. Using the first two years of data, what is the company's beta? What is the beta using the latest two years of data? How stable is the beta estimate? If you use all five years of data, how close is your estimate of beta to the estimate reported in Yahoo's Statistics section?