Question
Choose two publicly traded companies from two different industries that have not been chosen by other students. One stock should be a value stock (low
Choose two publicly traded companies from two different industries that have not been chosen by other students. One stock should be a value stock (low beta, low p/e, low B/M, Low EPS growth rate, Low P/S) and the other should be a growth stock (high beta, high p/e, high M/B, high EPS growth rate, high P/S). So high beta means a beta that is higher than the beta of the market, or 1. So high P/E ratio means a P/E ratio that is higher than the P/E of the market. Go to yahoo.com or NASDAQ.com and download their monthly prices for the past five years.
- Estimate the average monthly return for each stock.
- Estimate the standard deviation of monthly returns of each stock
- Which stock has the highest and the lowest total risk? Highest and lowest Systematic risk?
- Compare these two stocks (Risk-return trade-of).
Provide your answers in the window and attach your Excel file where your estimations can be seen.
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