1. From http://finance.yahoo.com download monthly prices for the most recent five years for Facebook, Inc. (FB). Select the tab Historical Prices, than Time Period: 5Y, Frequency: Monthly, and download to spreadsheet.

2. Follow the same procedure for the S&P500 (^GSPC) .

3. Calculate monthly returns for Facebook and for the S&P500. Use the last column of the data you downloaded from Yahoo (Adj close*). Returns are calculate as:

Rt=P1+Div-Pt-1/Pt-1

Fortunately, Yahoo adjusts prices for dividends and stock splits (if you want to know how the adjustment is done download daily prices and then compare "close" prices with "adj close" prices). Therefore, we can simplify the calculation and calculate returns as follows: Rt=Pt+Div-Pt-1/Pt-1

4. Estimate Beta using a simple regression. Regression analysis can be done in excel: the Yvariable is the column range for the stock returns and X-variable is the column range for the market returns (S&P 500). Beta is the coefficient of the X-variable.

5. Compare the value obtained with the value of Beta for Facebook reported in Yahoo Finance. Discuss the meaning of this number.

34 01-07-2018 172.58 2816.29004 -11.19% 3.60% 35 01-08-2018 175.73 2901.52002 1.83% 3.03% 36 01-09-2018 164.46 2913.97998 -6.41% 0.43% 37 01-10-2018 151.79 2711.73999 -7.70% -6.94% 38 01-11-2018 140.61 2760.16992 -7.37% 1.79% 39 01-12-2018 131.09 2506.8501 -6.77% -9.18% 40 01-01-2019 166.69 2704.1001 27.16% 7.87% 41 01-02-2019 161.45 2784.48999 -3.14% 2.97% 42 01-03-2019 166.69 2834.3999 3.25% 1.79% 43 01-04-2019 193.4 2945.83008 16.02% 3.93% 44 01-05-2019 177.47 2752.06006 -8.24% -6.58% 45 01-06-2019 193 2941.76001 8.75% 6.89% 46 01-07-2019 194.23 2980.37988 0.64% 1.31% 47 01-08-2019 185.67 2926.45996 -4.41% -1.81% 48 01-09-2019 178.08 2976.73999 -4.09% 1.72% 49 01-10-2019 191.65 3037.56006 7.62% 2.04% 50 01-11-2019 201.64 3140.97998 5.21% 3.40% 51 01-12-2019 205.25 3230.78003 1.79% 2.86% 52 01-01-2020 201.91 3225.52002 -1.63% -0.16% 53 01-02-2020 192.47 2954.21997 -4.68% -8.41% 54 01-03-2020 166.8 2584.59009 -13.34% -12.51% 55 01-04-2020 204.71 2912.42993 22.73% 12.68% 56 01-05-2020 225.09 3044.31006 9.96% 4.53% 57 01-06-2020 227.07 3100.29004 0.88% 1.84% 58 01-07-2020 253.67 3271.12012 11.71% 5.51% 59 01-08-2020 293.2 3500.31006 15.58% 7.01% 60 01-09-2020 261.9 3363 -10.68% -3.92% 61 01-10-2020 263.11 3269.95996 0.46% -2.77% 62 01-11-2020 276.48 3572.65991 5.08% 9.26% 63 11-11-2020 276.48 3572.65991 0.00% 0.00%E4 X V =(C4-C3)/C3 A B C D E Returns Returns 2 Date FB S&P 500 3 01-12-2015 104.66 2043.93994 FB S&p500 4 01-01-2016 112.21 1940.23999 7.21% -5.07% 5 01-02-2016 106.92 1932.22998 -4.71% -0.41% 6 01-03-2016 114.1 2059.73999 6.72% 6.60% 01-04-2016 117.58 2065.30005 3.05% 0.27% 8 01-05-2016 118.81 2096.94995 1.05% 1.53% 9 01-06-2016 114.28 2098.86011 -3.81% 0.09% 10 01-07-2016 123.94 2173.6001 8.45% 3.56% 11 01-08-2016 126.12 2170.94995 1.76% -0.12% 12 01-09-2016 128.27 2168.27002 1.70% -0.12% 13 01-10-2016 130.99 2126.1499 2.12% -1.94% 14 01-11-2016 118.42 2198.81006 -9.60% 3.42% 15 01-12-2016 115.05 2238.83008 -2.85% 1.82% 16 01-01-2017 130.32 2278.87012 13.27% 1.79% 17 01-02-2017 135.54 2363.63989 4.01% 3.72% 18 01-03-2017 142.05 2362.71997 4.80% -0.04% 19 01-04-2017 150.25 2384.19995 5.77% 0.91% 20 01-05-2017 151.46 2411.80005 0.81% 1.16% 21 01-06-2017 150.98 2423.40991 -0.32% 0.48% 22 01-07-2017 169.25 2470.30005 12.10% 1.93% 23 01-08-2017 171.97 2471.6499 1.61% 0.05% 24 01-09-2017 170.87 2519.36011 -0.64% 1.93% 25 01-10-2017 180.06 2575.26001 5.38% 2.22% 26 01-11-2017 177.18 2584.84009 -1.60% 0.37% 27 01-12-2017 176.46 2673.61011 -0.41% 3.43% 28 01-01-2018 186.89 2823.81006 5.91% 5.62% 29 01-02-2018 178.32 2713.83008 -4.59% -3.89% 30 01-03-2018 159.79 2640.87012 -10.39% -2.69% 31 01-04-2018 172 2648.05005 7.64% 0.27% 32 01-05-2018 191.78 2705.27002 11.50% 2.16% 33 01-06-2018 194.32 2718.37012 1.32% 0.48% 34 01-07-2018 172.58 2816.29004 -11.19% 3.60%