Go to Yahoo! finance site. Please download monthly adj. close prices from 12/1/2012 to 12/1/2017 for S&P 500 index (^SP500TR) and the following funds:

• European stock fund: Fidelity Europe (FIEUX)
• Latin America Fund: Fidelity Latin America (FLATX)
• Long-term bond fund: Fidelity Corporate Bond (FCBFX)
• Real Estate fund: T. Rowe Price Real Estate (TRREX)
• Small Cap Stock Fund: Fidelity Small Cap Stock (FSLCX)

1. Describe briefly the goal of each fund
2. Compute time plots of monthly prices and continuously compounded returns and comment.
   1. Are there any unusually large or small returns?
   2. Can you identify any news events that may explain these unusual values?
3. Make a plot showing the growth of $1 in each of the funds over the five-year period.
4. 1. Which fund gives the highest future value?
   2. Are you surprised?
5. Compute univariate descriptive statistics (mean, variance, standard deviation, skewness, kurtosis) for each return series and comment.
6. 1. Which funds have the highest and lowest average return?
   2. Which funds have the highest and lowest standard deviation?
   3. Which funds look most and least normally distributed?
7. Using a monthly risk free rate equal to 0.04167% per month (which corresponds to a continuously compounded annual rate of 0.5%), compute Sharpe's slope/ratio for each fund. Arrange these values in a table from highest to lowest. Which asset has the highest Sharpe ratios?
8. Compute estimated standard errors and form 95% confidence intervals for the estimates of the mean and standard deviation. Arrange these values in a table.
9. 1. Are these means and standard deviations estimated very precisely?
   2. Which estimates are more precise: the estimated means or standard deviations?
10. Convert the monthly sample means into annual estimates by multiplying by 12 and convert the monthly sample SDs into annual estimates by multiplying by the square root of 12. Comment on the values of these annual numbers.
    1. Using these values, compute annualized Sharpe ratios.
    2. Are the asset rankings the same as with the monthly Sharpe ratios?
11. Compute and plot all pair-wise scatterplots between these 5 funds. Briefly comment on any relationships you see.
12. Compute the sample covariance matrix of the returns on these 5 funds and comment on the direction of linear association between the asset returns.
13. Compute the sample correlation matrix of the returns on these 5 funds.
    1. Which funda are most highly correlated?
    2. Which are least correlated?
    3. Based on the estimated correlation values do you think diversification will reduce risk with these assets?