Question
My company is home depot. NOTES: (1) You must complete the assignment by using Excel spreadsheet. (2) You must use formulas for ALL of the
My company is home depot. NOTES: (1) You must complete the assignment by using Excel spreadsheet. (2) You must use formulas for ALL of the calculations. No credit will be given if you are using hand calculation or calculator, or formulas cannot be seen. (3) ZERO credit if your file does not contain the formulas in the cells. So, double check and make sure there are formulas in the corresponding cells before you submit the file. (4) Submit ONE file ONLY, with the following THREE spread sheets (tabs): (a) numerical results of your company; (b) numerical results of S&P500; (c) your answers to the questions (wordings). (5) 2 points (out of 10) will be deducted if you submit more than one file. (6) Save the final file in either xls or xlsx format. Do NOT save the file as the csv format. The formulas will not appear in the csv format. (7) Before submitting, please double check and triple check to make sure the file that you are going to submit is the correct file. Submitting the incorrect file will result in a 2-point deduction (out of 10) even if resubmitting is allowed. Go to Yahoo Finance website (finance.yahoo.com) and do the following steps: (1) Enter the ticker symbol into the Quote Lookup box located on the right-side of the screen for your company according to the Company List attached at the bottom of this assignment. (2) Click on Historical Data option. (3) Change the time period to January 2007 to August 2017, and change the frequency to monthly. Then hit the blue button Apply. (4) Hit Download Data. And, then save the downloaded file to a csv file (somehow it can only be saved as a csv file at this point. (5) Save the file to an xls or xlsx file. (6) Delete all of the columns except the Date and Adj. Close columns. (7) Repeat the steps (1) to (6) above for S&P500 Index. (8) Copy the S&P500 Index data into a sheet in your company excel file, i.e., combining two files into one. Complete the following tasks: (A) Calculate your companys monthly arithmetic average return, monthly geometric average return and return standard deviation for this period. (2 points) Note: There will be only ONE arithmetic average, ONE geometric average return and ONE standard deviation for the entire period. (B) Calculate the monthly arithmetic average return, monthly geometric average return and return standard deviation for the S&P500 index for that same period. (2 points) (C) Use a table to compare the monthly average returns (both the arithmetic and geometric average returns) vs. return standard deviations of your company with those of S&P500 index. (1.5 points) What did you find about the risk and return relationship of your company versus that of the S&P500 index? Interpret your findings. (1.5 points) (D) Calculate the Sharpe Ratio for both your company and S&P500 index during this period, assuming the average monthly risk-free rate during that period was 0.05% (i.e., 0.0005). Use the geometric average return for calculating the Sharpe Ratio. (1.5 points) Interpret your results. (1.5 points)
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