The monthly dividend-adjusted closing prices for Alphabet Inc., i.e., Google, (in $) and the monthly levels for the S&P500 Index for the period from 01 January 2015 to 30 September 2020 are found in the accompanying Excel file (Exercise 04 worksheet). The S&P500 index is commonly used as a proxy of the whole US market (also known as the market portfolio); an increasing market index signifies a boosting economy and vice versa. Your task as the Financial Manager of Google is to analyze the companys stock prices and returns, and obtain an estimate for the stocks beta (). The latter is necessary for making investment decisions, such as, deciding whether to construct a new data/server center for cloud services in the US or in a country outside the US.

To this end, you are required to do the following: via EXCLE

1. Calculate the monthly simple rate of return for the stock and the index. (Hint: Compute the rate of return as:

R4 = Rt-Rt-1.) Rt-1 R4 = Rt-Rt-1.) Rt-1