Provide the following analyses pertaining to a portfolio comprised of common stock issued\ by Facebook, Inc. (ticker: "FB") and common stock issued by Alphabet Inc. (ticker: "GOOG")\ (for some of the problems, you will need additional data provided on finance.yahoo.com-in\ the "Quote Lookup" box, type in "FB" or "GOOG"). Be sure to state assumptions upfront, and\ to print out, highlight, and hand in all relevant information that you use to calculate your\ answers so that it's clear where your numbers are coming from.\ Portfolio Beta\ Suppose you plan to invest

$1

million in FB and GOOG (

$500,000

in each).\ Begin by estimating the beta of this portfolio using the five-year time series of monthly\ stock returns from August 2014 to August 2019 (inclusive). Use the S&P500 Composite\ Index as your proxy for the "market" (in the "Get Quotes" box type "^GSPC"), and for\ simplicity, you can assume a constant riskless rate (say,

r_(f)=2%

).\ You'll need to start with the price data provided under the "Historical Data" tab, and\ calculate monthly stock returns using the monthly adjusted closing prices.

^(i)

\ Hint: Recall that a stock's beta is calculated as: the covariance between its excess returns\ and excess market returns, divided by the variance of excess market returns-i.e.,\

\\\\beta _(i)=Cov(r_(M),r_(i))/(v)ar(r_(M))

. ('excess return' refers to the return in excess of the riskless rate).

FNCE 3484-HW1 Be sure to include all of your names + Group \# on the first page of your submission! Facebook, Inc. (FB) NasdaqGS - NasdaqGS Real Time Price. Currency in US 181.76+0.46(+0.25%) At close: August 28 4:00PM EDT Alphabet Inc. (GOOG) NasdaqGS - NasdaqGS Real Time Price. Currency in USD 1,171.02+3.18(+0.27%) At close: August 28 4:00PM EDT ^^snapshots from Wednesday, August 28, 2019 Provide the following analyses pertaining to a portfolio comprised of common stock issued by Facebook, Inc. (ticker: "FB) and common stock issued by Alphabet Inc. (ticker: GOOG") (for some of the problems, you will need additional data provided on finance.yahoo.com-in the "Quote Lookup" box, type in "FB" or "GOOG"). Be sure to state assumptions upfront, and to print out, highlight, and hand in all relevant information that you use to calculate your answers so that it's clear where your numbers are coming from. 1) Portfolio Beta Suppose you plan to invest $1 million in FB and GOOG ( $500,000 in each). Begin by estimating the beta of this portfolio using the five-year time series of monthly stock returns from August 2014 to August 2019 (inclusive). Use the S\&P500 Composite Index as your proxy for the "market" (in the "Get Quotes" box type "^GSPC"), and for simplicity, you can assume a constant riskless rate (say, rf=2% ). You'll need to start with the price data provided under the "Historical Data" tab, and calculate monthly stock returns using the monthly adjusted closing prices. i Hint: Recall that a stock's beta is calculated as: the covariance between its excess returns and excess market returns, divided by the variance of excess market returns-i.e., i=Cov(rM,ri)/var(rM). ('excess return' refers to the return in excess of the riskless rate)