Question
Below is the question: Task 5 (14 points) What are the expected monthly returns of Amazon and Tesla stocks? What are their sample standard deviations?
Below is the question:
Task 5 (14 points) What are the expected monthly returns of Amazon and Tesla stocks? What are their sample standard deviations?
and i got the correct answers but I have no idea what to do with next question which is shown after the graph.
Amazon | Tesla | |||||||
Date | Adj Close | P1-P0 | (P1-P0)/P0 | Date | Adj Close | P1-P0 | (P1-P0)/P0 | |
Dec-12 | 250.87 | Dec-12 | 33.87 | |||||
Jan-13 | 265.50 | 14.63 | 0.0583171 | Jan-13 | 37.51 | 3.64 | 0.10747 | |
Feb-13 | 264.27 | -1.23 | -0.0046328 | Feb-13 | 34.83 | -2.68 | -0.07145 | |
Mar-13 | 266.49 | 2.22 | 0.0084005 | Mar-13 | 37.89 | 3.06 | 0.087855 | |
Apr-13 | 253.81 | -12.68 | -0.0475815 | Apr-13 | 53.99 | 16.10 | 0.424914 | |
May-13 | 269.20 | 15.39 | 0.060636 | May-13 | 97.76 | 43.77 | 0.810706 | |
Jun-13 | 277.69 | 8.49 | 0.0315379 | Jun-13 | 107.36 | 9.60 | 0.0982 | |
Jul-13 | 301.22 | 23.53 | 0.0847348 | Jul-13 | 134.28 | 26.92 | 0.250745 | |
Aug-13 | 280.98 | -20.24 | -0.0671934 | Aug-13 | 169.00 | 34.72 | 0.258564 | |
Sep-13 | 312.64 | 31.66 | 0.1126771 | Sep-13 | 193.37 | 24.37 | 0.144201 | |
Oct-13 | 364.03 | 51.39 | 0.1643743 | Oct-13 | 159.94 | -33.43 | -0.17288 | |
Nov-13 | 393.62 | 29.59 | 0.0812845 | Nov-13 | 127.28 | -32.66 | -0.2042 | |
Dec-13 | 398.79 | 5.17 | 0.0131345 | Dec-13 | 150.43 | 23.15 | 0.181882 | |
Jan-14 | 358.69 | -40.10 | -0.1005542 | Jan-14 | 181.41 | 30.98 | 0.205943 | |
Feb-14 | 362.10 | 3.41 | 0.0095068 | Feb-14 | 244.81 | 63.40 | 0.349485 | |
Mar-14 | 336.37 | -25.73 | -0.0710577 | Mar-14 | 208.45 | -36.36 | -0.14852 | |
Apr-14 | 304.13 | -32.24 | -0.0958468 | Apr-14 | 207.89 | -0.56 | -0.00269 | |
May-14 | 312.55 | 8.42 | 0.0276855 | May-14 | 207.77 | -0.12 | -0.00058 | |
Jun-14 | 324.78 | 12.23 | 0.0391298 | Jun-14 | 240.06 | 32.29 | 0.155412 | |
Jul-14 | 312.99 | -11.79 | -0.0363015 | Jul-14 | 223.30 | -16.76 | -0.06982 | |
Aug-14 | 339.04 | 26.05 | 0.0832296 | Aug-14 | 269.70 | 46.40 | 0.207792 | |
Sep-14 | 322.44 | -16.60 | -0.0489618 | Sep-14 | 242.68 | -27.02 | -0.10019 | |
Oct-14 | 305.46 | -16.98 | -0.052661 | Oct-14 | 241.70 | -0.98 | -0.00404 | |
Nov-14 | 338.64 | 33.18 | 0.1086231 | Nov-14 | 244.52 | 2.82 | 0.011667 | |
Dec-14 | 310.35 | -28.29 | -0.0835401 | Dec-14 | 222.41 | -22.11 | -0.09042 | |
Jan-15 | 354.53 | 44.18 | 0.1423554 | Jan-15 | 203.60 | -18.81 | -0.08457 | |
Feb-15 | 380.16 | 25.63 | 0.0722929 | Feb-15 | 203.34 | -0.26 | -0.00128 | |
Mar-15 | 372.10 | -8.06 | -0.0212016 | Mar-15 | 188.77 | -14.57 | -0.07165 | |
Apr-15 | 421.78 | 49.68 | 0.1335125 | Apr-15 | 226.05 | 37.28 | 0.197489 | |
May-15 | 429.23 | 7.45 | 0.0176633 | May-15 | 250.80 | 24.75 | 0.109489 | |
Jun-15 | 434.09 | 4.86 | 0.0113226 | Jun-15 | 268.26 | 17.46 | 0.069617 | |
Jul-15 | 536.15 | 102.06 | 0.2351126 | Jul-15 | 266.15 | -2.11 | -0.00787 | |
Aug-15 | 512.89 | -23.26 | -0.0433834 | Aug-15 | 249.06 | -17.09 | -0.06421 | |
Sep-15 | 511.89 | -1.00 | -0.0019497 | Sep-15 | 248.40 | -0.66 | -0.00265 | |
Oct-15 | 625.90 | 114.01 | 0.2227236 | Oct-15 | 206.93 | -41.47 | -0.16695 | |
Nov-15 | 664.80 | 38.90 | 0.0621504 | Nov-15 | 230.26 | 23.33 | 0.112743 | |
Dec-15 | 675.89 | 11.09 | 0.0166817 | Dec-15 | 240.01 | 9.75 | 0.042343 | |
Jan-16 | 587.00 | -88.89 | -0.1315155 | Jan-16 | 191.20 | -48.81 | -0.20337 | |
Feb-16 | 552.52 | -34.48 | -0.0587393 | Feb-16 | 191.93 | 0.73 | 0.003818 | |
Mar-16 | 593.64 | 41.12 | 0.0744226 | Mar-16 | 229.77 | 37.84 | 0.197155 | |
Apr-16 | 659.59 | 65.95 | 0.1110943 | Apr-16 | 240.76 | 10.99 | 0.04783 | |
May-16 | 722.79 | 63.20 | 0.095817 | May-16 | 223.23 | -17.53 | -0.07281 | |
Jun-16 | 715.62 | -7.17 | -0.0099199 | Jun-16 | 212.28 | -10.95 | -0.04905 | |
Jul-16 | 758.81 | 43.19 | 0.0603533 | Jul-16 | 234.79 | 22.51 | 0.106039 | |
Aug-16 | 769.16 | 10.35 | 0.0136397 | Aug-16 | 212.01 | -22.78 | -0.09702 | |
Sep-16 | 837.31 | 68.15 | 0.0886032 | Sep-16 | 204.03 | -7.98 | -0.03764 | |
Oct-16 | 789.82 | -47.49 | -0.0567173 | Oct-16 | 197.73 | -6.30 | -0.03088 | |
Nov-16 | 750.57 | -39.25 | -0.0496949 | Nov-16 | 189.40 | -8.33 | -0.04213 | |
Dec-16 | 768.66 | 18.09 | 0.0241016 | Dec-16 | 213.69 | 24.29 | 0.128247 | |
Jan-17 | 823.48 | 54.82 | 0.0713189 | Jan-17 | 251.93 | 38.24 | 0.178951 | |
Feb-17 | 845.04 | 21.56 | 0.0261816 | Feb-17 | 249.99 | -1.94 | -0.0077 | |
Mar-17 | 886.54 | 41.50 | 0.0491101 | Mar-17 | 278.30 | 28.31 | 0.113244 | |
Apr-17 | 924.99 | 38.45 | 0.0433709 | Apr-17 | 314.07 | 35.77 | 0.12853 | |
May-17 | 994.62 | 69.63 | 0.0752765 | May-17 | 341.01 | 26.94 | 0.085777 | |
Jun-17 | 968.00 | -26.62 | -0.026764 | Jun-17 | 361.61 | 20.60 | 0.060409 | |
Jul-17 | 987.78 | 19.78 | 0.0204339 | Jul-17 | 323.47 | -38.14 | -0.10547 | |
Aug-17 | 980.60 | -7.18 | -0.0072689 | Aug-17 | 355.90 | 32.43 | 0.100257 | |
Sep-17 | 961.35 | -19.25 | -0.0196308 | Sep-17 | 341.10 | -14.80 | -0.04158 | |
Oct-17 | 1105.28 | 143.93 | 0.1497166 | Oct-17 | 331.53 | -9.57 | -0.02806 | |
Nov-17 | 1176.75 | 71.47 | 0.0646623 | Nov-17 | 308.85 | -22.68 | -0.06841 | |
Dec-17 | 1169.47 | -7.28 | -0.0061866 | Dec-17 | 311.35 | 2.50 | 0.008095 | |
Total | 1.7238863 | Total | 2.93679 | |||||
Average Monthly Return | 2.87% | Average Monthly Return | 4.89% | |||||
Standard Deviation |
| 0.0762383 | Standard Deviation |
| 0.165063 |
Task 6 (8 points) Suppose you purchased Amazon and Tesla stocks at the end of 2012 and held them for 5 years. What are your monthly average investment returns from these stocks? Compare these against the expected monthly returns computed in Task 5.
I don't know i did it correctly but here are what I got:
Amazon | Tesla | |||||||||||
Date | Adj Close | P1-P0 | (P1-P0)/P0 | Compound | Compound (P1-P0)/P0 | Date | Adj Close | P1-P0 | (P1-P0)/P0 | Compound | Compound (P1-P0)/P0 | |
Dec-12 | 250.87 | Dec-12 | 33.87 | |||||||||
Jan-13 | 265.50 | 14.63 | 0.0583171 | 0.0583171 | Jan-13 | 37.51 | 3.64 | 0.10747 | 0.1074697 | |||
Feb-13 | 264.27 | -1.23 | -0.004633 | 0.0580469 | -0.00463281 | Feb-13 | 34.83 | -2.68 | -0.07145 | 0.0997913 | -0.071447511 | |
Mar-13 | 266.49 | 2.22 | 0.0084005 | 0.0585345 | 0.008400504 | Mar-13 | 37.89 | 3.06 | 0.087855 | 0.1085584 | 0.087855206 | |
Apr-13 | 253.81 | -12.68 | -0.047581 | 0.0557494 | -0.047581495 | Apr-13 | 53.99 | 16.10 | 0.424914 | 0.1546865 | 0.424914316 | |
May-13 | 269.20 | 15.39 | 0.060636 | 0.0591298 | 0.060635964 | May-13 | 97.76 | 43.77 | 0.810706 | 0.2800917 | 0.810705656 | |
Jun-13 | 277.69 | 8.49 | 0.0315379 | 0.0609946 | 0.031537851 | Jun-13 | 107.36 | 9.60 | 0.0982 | 0.3075966 | 0.09819966 | |
Jul-13 | 301.22 | 23.53 | 0.0847348 | 0.066163 | 0.084734772 | Jul-13 | 134.28 | 26.92 | 0.250745 | 0.384725 | 0.250745136 | |
Aug-13 | 280.98 | -20.24 | -0.067193 | 0.0617173 | -0.06719338 | Aug-13 | 169.00 | 34.72 | 0.258564 | 0.4842011 | 0.258564204 | |
Sep-13 | 312.64 | 31.66 | 0.1126771 | 0.0686714 | 0.112677069 | Sep-13 | 193.37 | 24.37 | 0.144201 | 0.5540234 | 0.144201154 | |
Oct-13 | 364.03 | 51.39 | 0.1643743 | 0.0799592 | 0.164374301 | Oct-13 | 159.94 | -33.43 | -0.17288 | 0.4582433 | -0.172880974 | |
Nov-13 | 393.62 | 29.59 | 0.0812845 | 0.0864586 | 0.081284499 | Nov-13 | 127.28 | -32.66 | -0.2042 | 0.3646693 | -0.204201592 | |
Dec-13 | 398.79 | 5.17 | 0.0131345 | 0.0875942 | 0.013134531 | Dec-13 | 150.43 | 23.15 | 0.181882 | 0.4309962 | 0.181882418 | |
Jan-14 | 358.69 | -40.10 | -0.100554 | 0.0787863 | -0.100554192 | Jan-14 | 181.41 | 30.98 | 0.205943 | 0.5197569 | 0.205943046 | |
Feb-14 | 362.10 | 3.41 | 0.0095068 | 0.0795353 | 0.009506828 | Feb-14 | 244.81 | 63.40 | 0.349485 | 0.7014039 | 0.349484552 | |
Mar-14 | 336.37 | -25.73 | -0.071058 | 0.0738837 | -0.071057748 | Mar-14 | 208.45 | -36.36 | -0.14852 | 0.5972291 | -0.14852335 | |
Apr-14 | 304.13 | -32.24 | -0.095847 | 0.0668022 | -0.095846807 | Apr-14 | 207.89 | -0.56 | -0.00269 | 0.5956246 | -0.002686486 | |
May-14 | 312.55 | 8.42 | 0.0276855 | 0.0686516 | 0.027685473 | May-14 | 207.77 | -0.12 | -0.00058 | 0.5952808 | -0.000577204 | |
Jun-14 | 324.78 | 12.23 | 0.0391298 | 0.0713379 | 0.039129776 | Jun-14 | 240.06 | 32.29 | 0.155412 | 0.6877947 | 0.155412203 | |
Jul-14 | 312.99 | -11.79 | -0.036302 | 0.0687483 | -0.036301524 | Jul-14 | 223.30 | -16.76 | -0.06982 | 0.6397757 | -0.069815859 | |
Aug-14 | 339.04 | 26.05 | 0.0832296 | 0.0744701 | 0.08322956 | Aug-14 | 269.70 | 46.40 | 0.207792 | 0.7727162 | 0.207792245 | |
Sep-14 | 322.44 | -16.60 | -0.048962 | 0.0708239 | -0.048961794 | Sep-14 | 242.68 | -27.02 | -0.10019 | 0.6953013 | -0.100185457 | |
Oct-14 | 305.46 | -16.98 | -0.052661 | 0.0670943 | -0.052660994 | Oct-14 | 241.70 | -0.98 | -0.00404 | 0.6924935 | -0.004038223 | |
Nov-14 | 338.64 | 33.18 | 0.1086231 | 0.0743823 | 0.108623142 | Nov-14 | 244.52 | 2.82 | 0.011667 | 0.7005731 | 0.011667385 | |
Dec-14 | 310.35 | -28.29 | -0.08354 | 0.0681684 | -0.083540065 | Dec-14 | 222.41 | -22.11 | -0.09042 | 0.6372258 | -0.09042205 | |
Jan-15 | 354.53 | 44.18 | 0.1423554 | 0.0778725 | 0.14235538 | Jan-15 | 203.60 | -18.81 | -0.08457 | 0.5833334 | -0.084573525 | |
Feb-15 | 380.16 | 25.63 | 0.0722929 | 0.0835021 | 0.072292909 | Feb-15 | 203.34 | -0.26 | -0.00128 | 0.5825884 | -0.001277063 | |
Mar-15 | 372.10 | -8.06 | -0.021202 | 0.0817318 | -0.021201594 | Mar-15 | 188.77 | -14.57 | -0.07165 | 0.540844 | -0.07165335 | |
Apr-15 | 421.78 | 49.68 | 0.1335125 | 0.092644 | 0.133512476 | Apr-15 | 226.05 | 37.28 | 0.197489 | 0.6476548 | 0.197488998 | |
May-15 | 429.23 | 7.45 | 0.0176633 | 0.0942804 | 0.017663265 | May-15 | 250.80 | 24.75 | 0.109489 | 0.7185659 | 0.10948905 | |
Jun-15 | 434.09 | 4.86 | 0.0113226 | 0.0953479 | 0.011322566 | Jun-15 | 268.26 | 17.46 | 0.069617 | 0.7685904 | 0.069617252 | |
Jul-15 | 536.15 | 102.06 | 0.2351126 | 0.1177654 | 0.235112601 | Jul-15 | 266.15 | -2.11 | -0.00787 | 0.762545 | -0.007865563 | |
Aug-15 | 512.89 | -23.26 | -0.043383 | 0.1126563 | -0.043383396 | Aug-15 | 249.06 | -17.09 | -0.06421 | 0.7135806 | -0.064211897 | |
Sep-15 | 511.89 | -1.00 | -0.00195 | 0.1124366 | -0.001949736 | Sep-15 | 248.40 | -0.66 | -0.00265 | 0.7116896 | -0.00264998 | |
Oct-15 | 625.90 | 114.01 | 0.2227236 | 0.1374789 | 0.222723643 | Oct-15 | 206.93 | -41.47 | -0.16695 | 0.5928741 | -0.166948478 | |
Nov-15 | 664.80 | 38.90 | 0.0621504 | 0.1460233 | 0.062150443 | Nov-15 | 230.26 | 23.33 | 0.112743 | 0.6597168 | 0.112743453 | |
Dec-15 | 675.89 | 11.09 | 0.0166817 | 0.1484592 | 0.01668175 | Dec-15 | 240.01 | 9.75 | 0.042343 | 0.6876515 | 0.042343439 | |
Jan-16 | 587.00 | -88.89 | -0.131516 | 0.1289346 | -0.131515503 | Jan-16 | 191.20 | -48.81 | -0.20337 | 0.5478062 | -0.203366522 | |
Feb-16 | 552.52 | -34.48 | -0.058739 | 0.121361 | -0.058739319 | Feb-16 | 191.93 | 0.73 | 0.003818 | 0.5498977 | 0.003817971 | |
Mar-16 | 593.64 | 41.12 | 0.0744226 | 0.130393 | 0.074422634 | Mar-16 | 229.77 | 37.84 | 0.197155 | 0.6583129 | 0.197155277 | |
Apr-16 | 659.59 | 65.95 | 0.1110943 | 0.144879 | 0.111094283 | Apr-16 | 240.76 | 10.99 | 0.04783 | 0.6898003 | 0.047830399 | |
May-16 | 722.79 | 63.20 | 0.095817 | 0.1587608 | 0.09581702 | May-16 | 223.23 | -17.53 | -0.07281 | 0.6395752 | -0.072811096 | |
Jun-16 | 715.62 | -7.17 | -0.00992 | 0.1571859 | -0.009919871 | Jun-16 | 212.28 | -10.95 | -0.04905 | 0.6082024 | -0.049052534 | |
Jul-16 | 758.81 | 43.19 | 0.0603533 | 0.1666726 | 0.060353265 | Jul-16 | 234.79 | 22.51 | 0.106039 | 0.6726957 | 0.106039166 | |
Aug-16 | 769.16 | 10.35 | 0.0136397 | 0.168946 | 0.013639745 | Aug-16 | 212.01 | -22.78 | -0.09702 | 0.6074288 | -0.097022866 | |
Sep-16 | 837.31 | 68.15 | 0.0886032 | 0.1839151 | 0.088603187 | Sep-16 | 204.03 | -7.98 | -0.03764 | 0.5845653 | -0.037639716 | |
Oct-16 | 789.82 | -47.49 | -0.056717 | 0.173484 | -0.056717334 | Oct-16 | 197.73 | -6.30 | -0.03088 | 0.5665152 | -0.030877827 | |
Nov-16 | 750.57 | -39.25 | -0.049695 | 0.1648627 | -0.049694867 | Nov-16 | 189.40 | -8.33 | -0.04213 | 0.542649 | -0.042128166 | |
Dec-16 | 768.66 | 18.09 | 0.0241016 | 0.1688362 | 0.024101637 | Dec-16 | 213.69 | 24.29 | 0.128247 | 0.6122422 | 0.128247142 | |
Jan-17 | 823.48 | 54.82 | 0.0713189 | 0.1808774 | 0.07131893 | Jan-17 | 251.93 | 38.24 | 0.178951 | 0.7218034 | 0.178950773 | |
Feb-17 | 845.04 | 21.56 | 0.0261816 | 0.185613 | 0.026181569 | Feb-17 | 249.99 | -1.94 | -0.0077 | 0.7162451 | -0.007700504 | |
Mar-17 | 886.54 | 41.50 | 0.0491101 | 0.1947285 | 0.049110103 | Mar-17 | 278.30 | 28.31 | 0.113244 | 0.7973559 | 0.11324446 | |
Apr-17 | 924.99 | 38.45 | 0.0433709 | 0.2031741 | 0.043370872 | Apr-17 | 314.07 | 35.77 | 0.12853 | 0.8998404 | 0.128530437 | |
May-17 | 994.62 | 69.63 | 0.0752765 | 0.2184683 | 0.075276496 | May-17 | 341.01 | 26.94 | 0.085777 | 0.9770261 | 0.085777064 | |
Jun-17 | 968.00 | -26.62 | -0.026764 | 0.2126212 | -0.026763985 | Jun-17 | 361.61 | 20.60 | 0.060409 | 1.036047 | 0.060408711 | |
Jul-17 | 987.78 | 19.78 | 0.0204339 | 0.2169659 | 0.020433914 | Jul-17 | 323.47 | -38.14 | -0.10547 | 0.9267723 | -0.105472707 | |
Aug-17 | 980.60 | -7.18 | -0.007269 | 0.2153888 | -0.007268878 | Aug-17 | 355.90 | 32.43 | 0.100257 | 1.0196873 | 0.100256571 | |
Sep-17 | 961.35 | -19.25 | -0.019631 | 0.2111605 | -0.019630839 | Sep-17 | 341.10 | -14.80 | -0.04158 | 0.977284 | -0.041584682 | |
Oct-17 | 1105.28 | 143.93 | 0.1497166 | 0.2427748 | 0.149716603 | Oct-17 | 331.53 | -9.57 | -0.02806 | 0.949865 | -0.028056309 | |
Nov-17 | 1176.75 | 71.47 | 0.0646623 | 0.2584731 | 0.06466232 | Nov-17 | 308.85 | -22.68 | -0.06841 | 0.8848846 | -0.068410078 | |
Dec-17 | 1169.47 | -7.28 | -0.006187 | 0.2568741 | -0.006186555 | Dec-17 | 311.35 | 2.50 | 0.008095 | 0.8920474 | 0.008094544 | |
Average compounded monthly return | 2.82% | Average compounded monthly return | 4.80% |
Task 6 asks me to compare... but shouldn't compound monthly return be greater than the task5? Could you help me with this?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started