2. Systematic Risk and Beta

a. On what stock exchange the company share listed? What is its Ticker symbol?

b. Find the recent 60 month return. Compute the average return and then standard deviation for each year. For the same years find average and standard deviation of S&P index. Create two line graphs: one for average return (put year on x-axis and average return of the company and S&P on y-axis) and one for standard deviation (put year on x-axis and standard deviation of the company and S&P on y-axis). In both graphs interpret best and worst years.

c. Use CAPM to estimate the beta (In Excel regression function Y will be risk-premium of your company and X will be market risk premium). Compare it to the beta you found on finance.yahoo.com. How similar are they? Discuss. Also interpret companys systematic risk.

Hint: Go to finance.yahoo.com and find Historical Data. Use the prices that appear in the last column (adjusted for dividend payments and stock splits) to compute return. Next, download S&P 500 index over the same period (Search for S&P 500 on finance.yahoo.com and then go to historical data) then compute return using the prices in the last column.

Please Analyze this question for IBM (International Business Machines)