Perform the following tasks (40 points)

a) Time plot of daily price and volume of a stock of your choice from January 2, 2001 till December 30, 2016 (you can choose any other sample period you like with 15 years of data). (6 points)

b) Compute log returns. Construct time plot of daily log returns of the stock for the sample data (6 points)

c) Compute the sample mean, standard deviation, minimum, and maximum of the log return series. (6 points)

d) Compute the total log return over the holding period (from January 2, 2001 till December 30, 2016 or your own sample period that you used in part 2a). Print the return in percentage terms. Interpret the total holding period return (interpret in percentage) (8 points)

Hint: It is simple but will require you to understand what you have to do!

See slide 5 of power point presentation of Part_I_Analysis_of_Financial_Data.

The class R codes provide guidance, but will not give you the solution directly. You understanding of the problem is important. You may to look online.

Use the sum() function with the return series inside the function.

e) What is the average annual return over the holding period of the stock? Provide the number in percentage terms. Interpret the average annual return (interpret in percentage) (6 points)

Hint: The average annual return will be equal to the total return over the sample period obtained in part (d) divided by number of years in the data.

f) Interpret your findings (8 points)