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SP 500 share price St. Dev Home Depot Inc. Share price St. Dev Jan.14 1,845.86 76.67 82.11 4.77 Feb.14 1,782.68 46.45 76.64 3.92 Mar.14 1,857.68

SP 500share price

St. Dev

Home Depot Inc.

Share price

St. Dev

Jan.14

1,845.86

76.67

82.11

4.77

Feb.14

1,782.68

46.45

76.64

3.92

Mar.14

1,857.68

58.04

80.73

3.98

Apr.14

1,884.39

57.36

79.51

4.19

May.14

1,923.87

47.40

80.25

3.75

Jun.14

1,962.29

63.20

81.32

3.31

Jul.14

1,929.80

96.83

80.56

3.37

Aug.14

2,004.07

68.84

93.04

2.92

Sep.14

1,971.44

49.25

92.14

9.65

Oct.14

2,018.21

60.58

96.81

11.21

Nov.14

2031.92

82.01

97.65

8.45

Dec.14

2,065.78

109.28

99.49

6.91

Jan.15

2,058.90

120.86

105.16

8.02

Feb.15

1,996.67

52.82

104.78

6.52

Mar.15

2,105.23

69.00

113.88

9.91

Apr.15

2,087.38

66.85

106.98

9.05

May.15

2,108.64

45.53

111.97

4.36

Jun.15

2,067.00

46.83

112.45

4.02

Jul.15

2,104.49

31.37

117.62

2.83

Aug.15

1,970.09

35.52

113.99

3.90

Sep.15

1,919.65

126.25

116.23

4.99

Oct.15

2,080.76

137.94

124.24

4.43

Nov.15

2099.20

123.46

125.98

7.39

Dec.15

2,082.93

115.42

133.52

12.85

  1. Plot the holding period returns from the Company against the SP500 Index

b. From the graphs in part b) describe the nature of the correlation between the stock returns of The Company and the returns for the SP500 index.

c. Obtain from Standard and Poor or alternative source such as Yahoo Finance, https://finance.yahoo.com/quote/HD/key-statistics/ the beta of The Company.

d. Assume that the Treasury bill rate is 2% and that the expected market return is 6%. In consideration of the betas for The Company, estimate an appropriate rate of return, using CAPM, for the Company

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