Go to finance.yahoo.com and enter GOOG in the box on the top left. Hit Look Up and then choose Historical Prices on the panel on the left (This option is in the QUOTES section, directly above the CHARTS section). Then, select the Monthly option and hit the Get Prices option. Scroll to the bottom of the page and hit Download to Spreadsheet.

The close price jumps dramatically from the close of February 2014 and March 2014. Why? Compute returns for the stock in a manner that accounts for this problem. DO NOT USE THE AJUSTED CLOSE DATA! Rather, fix your initial investment and compute your returns as if you did not invest or divest from the beginning of the data series until the end. Then, compute returns using the adjusted close column. Do the resulting returns match? (They should...)

I provide data for the risk-free rate and the market. Use this data along with your GOOG data to estimate the security characteristic line for the CAPM. What is GOOGs ? What is GOOGs ? Is this result consistent with the CAPM?

Using the data from Question 1, what is the idiosyncratic volatility of GOOG? What is the market volatility of GOOG? What proportion of GOOGs total variance comes from id- iosyncratic variance?

Go to http://vlab.stern.nyu.edu/welcome/risk/. Which country has the highest level of SRISK? Scroll down to the second chart and hit All at the top right of the chart to see the longest possible history. How does the current level of SRISK compare with the level in January 2007? How does the current level of SRISK compare with the level in January 2009?