Question
Capital Markets and Pricing Risk Guided Case Study Today is December 30, 2022, and you have just started your new job with a financial planning
Capital Markets and Pricing Risk Guided Case Study Today is December 30, 2022, and you have just started your new job with a financial planning firm. You have been asked to review a portion of a clients stock portfolio to determine the risk/return profiles of 12 stocks in the portfolio. Specifically, you have been asked to determine the monthly average returns and standard deviations for the following 12 stocks (with their symbols in parentheses) for the past five years:
Archer Daniels Midland (ADM) | Boeing (BA) | Caterpillar (CAT) | Deere & Co. (DE) |
General Mills, Inc. (GIS) | eBay (EBAY) | Hershey (HSY) | International Business Machines Corp. (IBM) |
JPMorgan Chase & Co. (JPM) | Microsoft (MSFT) | Procter & Gamble (PG) | Walmart (WMT) |
1. Collect price information for each stock from Yahoo! Finance (finance.yahoo.com) as follows:
a. Enter the stock symbol. On the page for that stock, click Historical Prices on the left side of the page.
b. Enter the start date as December 1, 2017 and the end date as December 30, 2022 to cover the five year period. Make sure you click monthly next to the date; the closing prices reported by Yahoo! will then be for the last day of each month.
c. After hitting Get Prices, scroll to the bottom of the first page and click Download to Spreadsheet. If you are asked if you want to open or save the file, click open.
d. Copy the entire spreadsheet, open Excel, and paste the Web data into a spreadsheet. Delete all the columns except the date and the adjusted close (the first and last columns).
e. Keep the Excel file open and go back to the Yahoo! Finance Web page and hit the back button. If you are asked if you want to save the data, click no.
f. When you return to the prices page, enter the next stock symbol and hit Get Prices again. Do not change the dates or frequency, but make sure you have the same dates for all the stocks you will download. Again, click Download to Spreadsheet and then open the file. Copy the last column, Adj. Close, paste it into the Excel file and change Adj. Close to the stock symbol. Make sure that the first and last prices are in the same rows as the first stock.
g. Repeat these steps for the remaining 10 stocks, pasting each closing price right next to the other stocks, again making sure that the correct prices on the correct dates all appear on the same rows.
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