1) Suppose you invest $10,000 in each of the 3 stocks at the beginning of 2010, how much you get for each stock if you sell all your stocks after 3 months? And what is the overall growth rate of your purchasing power?

2) Calculate the geometric average and arithmetic average rate of returns for each of the three stocks and present them on an annual basis, and briefly explain the similarities/differences.

3) Estimate the standard deviations for each of the stocks and compute VaR at 5%. Hint: assume the returns follow a normal distribution.

Date Level of the Return on S&P 500 the S&P Index 500 Index Rate of MICROSO COCA Change in FT CORP COLA CO CPI EXXON MOBIL CORP Return on 30-Day Treasury Bill 0.003% 0.001% 0.007% 29-Jan-10 26-Feb-10 31-Mar-10 1073.87 1104.49 1169.43 -3.697% 2.851% 5.880% 0.342% 0.025% 0.411% -7.546% 2.200% 2.154% 4.825% -2.820% 5.159% -5.514% 1.537% 3.046%