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1. You want to evaluate the recent investment performance for two stocks Walgreens and Exxon Mobilrelative to the S&P 500 index. a. Under the Company

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1. You want to evaluate the recent investment performance for two stocks Walgreens and Exxon Mobilrelative to the S&P 500 index. a. Under the "Company Analysis" tab, look up the ticker symbols for Walgreens and Exxon Mobil. b. For each firm, as well as for the S&P 500 index, download daily price information for the past year using the menu options available under the I'Prices" tab for each company. c. For each firm, calculate the set of daily returns that correspond to these daily price series. d. Using daily returns for the past year, calculate the beta coefcient for Walgreens and Exxon Mobil compared to the S&P 500 index. (Note: You can either build your own spreadsheet model to perform these calculations or use Excel's builtin functions for "Slope" or " Regression") e. Based on your results in Part d, which stock appears to be the riskiest? To evaluate how sensitive beta estimates are to the period over which returns are mea- sured, you now want to repeat the analysis in the last problem using weekly data over the past year. a. For each rm, as well as for the S&P 500 index, download weekly price information for the past year using the menu options available in the Prices tab for each company. b. For each rm, calculate the set of weekly returns that correspond to these daily price series. c. Using weekly returns for the past year, calculate the beta for Walgreens and Exxon Mobil compared to the S&P 500 index. d. How do your beta estimates for Walgreens and Exxon Mobil differ when using daily versus weekly data in the estimation process? Does your conclusion change about which stock is the riskiest? You would now like to evaluate the impact that the choice of index used for the market portfolio proxy has on the beta estimation process. a. Collect monthly price data for Walgreens and Exxon Mobil for the past ve years and use this information to compute monthly returns over that period. b. Collect monthly price data for the S&P 500 index and MSCI World index (based in US dollars) for the past ve years and compute monthly returns for both series. (Note: You can access the information for a wide variety of different indexes under the main "Indi- ces" tab.) c. Calculate betas for both stocks compared to the S&P 500 index. d. Calculate betas for both stocks compared to the MSCI World index. e. Compare the two beta estimates for each stock and explain why they would differ from nnnnnn flu/1

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