Financial Investments

Home Work $1$

Download Daily data on $5$ global stock markets $($July $01,2011$ to till date$).$ Read the data into Excel and make sure to order the data so that time runs forward. Do your analysis on the daily closing price data. Name the spreadsheet tab with the data "index name".

Make a time plot $($line plot in Excel$)$ of the daily price data over the period. Please put informative titles and labels on the graph. Place this graph in a separate tab $($spreadsheet$)$ from the data. Name this tab "graphs". Comment on what you see $($eg$.$ price trends, etc$).$

Home Work $2$

Make a time plot of the Holding period yield $($HPY$)/$Returns of daily price data over the period and place it in the "graph" tab. Comment on what you see and compare with the plot of the raw price data. Why is a plot of the log of prices informative?

Home Work $3$

a$)$ Compute the arithmetic mean daily rate of return $($HPY$)$ for each stock market index. Which stock market is most desirable by this measure?

b$)$ Compute the standard deviation of the annual rate of return for each stock market index. By this measure, which is the preferable?

c$)$ Compute the coefficient of variation for each stock. By this relative measure of risk, which stock market is preferable?