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Can you solve this The monthly dividend-adjusted closing prices for Alphabet Inc., i.e., Google. (in S) and the monthly levels for the S&P500 Index for

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Can you solve this

The monthly dividend-adjusted closing prices for Alphabet Inc., i.e., Google. (in S) and the monthly levels for the S&P500 Index for the period from 01 January 2015 to 30 September 2020 are found in the accompanying Excel file (Exercise 04 worksheet). The S&P500 index is commonly used as a proxy of the whole US market (also known as the market portfolio), an increasing market index signifies a boosting economy and vice versa. Your task as the Financial Manager of Google is to analyze the company's stock prices and returns, and obtain an estimate for the stock's beta (B). The latter is necessary for making investment decisions, such as, deciding whether to construct a new data/server center for cloud services in the US or in a country outside the US. To this end, you are required to do the following: a) Calculate the monthly simple rate of return for the stock and the index. (Hint: R-R-1 Compute the rate of return as: R = [4 marks] Rt-1 b) Compute the descriptive statistics for all 4 time-series and the correlation coefficient between Google's stock returns and the returns on S&P500. (Hint: The descriptive statistics of interest are the mean, median, standard deviation, variance, kurtosis, skewness, minimum, maximum and count.) (4 marks] c) Plot Google's stock prices and the levels of the S&P500 index in the same graph, and comment on the performance of Google's stock relatively to the index. For the latter, use insights also from the descriptive statistics and the correlation coefficient you computed in part (b). (Hint: Choose both time-series and use the line plot. Then, add the dates in the horizontal axis. For this, right- click on the plot, press "Select Data and in the dialog box, set "Horizontal (category) axis label" to the dates series. Also, ensure that the S&P500 index is plotted across a Secondary axis". The final result should look as below.) [6 marks] A Date 01/01/15 01/02/15 01/03/15 01/04/15 01/05/15 01/06/15 01/07/15 Google S&P500 533.06 1994.99 556.87 2104.50 546.50 2067.89 537.34 2085.51 532.11 2107.39 520.51 2063.11 625.61 2103.84 The monthly dividend-adjusted closing prices for Alphabet Inc., i.e., Google. (in S) and the monthly levels for the S&P500 Index for the period from 01 January 2015 to 30 September 2020 are found in the accompanying Excel file (Exercise 04 worksheet). The S&P500 index is commonly used as a proxy of the whole US market (also known as the market portfolio), an increasing market index signifies a boosting economy and vice versa. Your task as the Financial Manager of Google is to analyze the company's stock prices and returns, and obtain an estimate for the stock's beta (B). The latter is necessary for making investment decisions, such as, deciding whether to construct a new data/server center for cloud services in the US or in a country outside the US. To this end, you are required to do the following: a) Calculate the monthly simple rate of return for the stock and the index. (Hint: R-R-1 Compute the rate of return as: R = [4 marks] Rt-1 b) Compute the descriptive statistics for all 4 time-series and the correlation coefficient between Google's stock returns and the returns on S&P500. (Hint: The descriptive statistics of interest are the mean, median, standard deviation, variance, kurtosis, skewness, minimum, maximum and count.) (4 marks] c) Plot Google's stock prices and the levels of the S&P500 index in the same graph, and comment on the performance of Google's stock relatively to the index. For the latter, use insights also from the descriptive statistics and the correlation coefficient you computed in part (b). (Hint: Choose both time-series and use the line plot. Then, add the dates in the horizontal axis. For this, right- click on the plot, press "Select Data and in the dialog box, set "Horizontal (category) axis label" to the dates series. Also, ensure that the S&P500 index is plotted across a Secondary axis". The final result should look as below.) [6 marks] A Date 01/01/15 01/02/15 01/03/15 01/04/15 01/05/15 01/06/15 01/07/15 Google S&P500 533.06 1994.99 556.87 2104.50 546.50 2067.89 537.34 2085.51 532.11 2107.39 520.51 2063.11 625.61 2103.84

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