Question
Obtain monthly adjusted close prices of S&P500 Index (symbol: ^GSPC) and Microsoft (symbol: MSFT) during December 2006 December 2019 from Yahoo Finance. Then, using Excel,
Obtain monthly adjusted close prices of S&P500 Index (symbol: ^GSPC) and Microsoft (symbol: MSFT) during December 2006 December 2019 from Yahoo Finance. Then, using Excel, compute monthly returns during January 2007 December 2019. From these returns, compute and report beta of Microsoft using the formula we learned in class. Suppose todays Treasury bill rate is 2% per annum. Historically, market risk premium is estimated to be 8% per annum. What is todays expected return per annum of Microsoft, according to CAPM?
Guidelines:
1. Use the VAR.P( : ) command to compute variance.
2. Use the COVARIANCE.P( : , : ) command to compute covariance.
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