Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question #1 (40 points) Download monthly adjusted close price data for Apple (AAPL, Stock A) and Amazon (AMZN, Stock B) for the period of Sep.

image text in transcribed

Question #1 (40 points) Download monthly adjusted close price data for Apple (AAPL, Stock A) and Amazon (AMZN, Stock B) for the period of Sep. 2005 through Sep. 2021 (use Finance.Yahoo.com). Use the SP500 index (SPY) as a proxy for the market portfolio. Use Excel for this question. Stock returns are computed as Pt+1 Pt P Tt+1 1. Compute the mean and the standard deviation of these three assets: mean returns standard deviations of returns {, , m} {, B, m} (Hint: use "stdev.p function in Excel) 2. Compute Pm,A the correlation coefficients between asset m and asset A, and Pm,B the correlation coefficients between asset m and asset B. (Hint: use CORREL function in Excel) 3. Estimate BA and BB using the following formula, BA = Pm, A om OB BB = Pm,B (Hint: alternatively you can use the "SLOPE" function in Excel) Question #1 (40 points) Download monthly adjusted close price data for Apple (AAPL, Stock A) and Amazon (AMZN, Stock B) for the period of Sep. 2005 through Sep. 2021 (use Finance.Yahoo.com). Use the SP500 index (SPY) as a proxy for the market portfolio. Use Excel for this question. Stock returns are computed as Pt+1 Pt P Tt+1 1. Compute the mean and the standard deviation of these three assets: mean returns standard deviations of returns {, , m} {, B, m} (Hint: use "stdev.p function in Excel) 2. Compute Pm,A the correlation coefficients between asset m and asset A, and Pm,B the correlation coefficients between asset m and asset B. (Hint: use CORREL function in Excel) 3. Estimate BA and BB using the following formula, BA = Pm, A om OB BB = Pm,B (Hint: alternatively you can use the "SLOPE" function in Excel)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Computational Finance Using C And C #

Authors: George Levy DPhil University Of Oxford

1st Edition

0750669195, 978-0750669191

More Books

Students also viewed these Finance questions

Question

How is a market defined and segmented? AppendixLO1

Answered: 1 week ago