To answer Question 3, you need to download the spreadsheet with stock price and return data from the ?assignment tab? in Canvas and access the spreadsheet tab titled ?Stock price data for Q3?. This tab contains monthly stock prices, dividends, and stock split information for Mastercard Corporation (MA), International Business Machines Corp. (IBM), and Under Armour Inc. (UA) for the period spanning from December 2011 through December 2015. For each company, there are 49 monthly closing prices, from which you will be able to calculate 48 months of stock returns.

3. Calculate the monthly returns for each of the stocks:

1. Calculate the arithmetic average monthly return for each stock. (3 points)
2. Calculate the geometric average monthly return for each stock. (3 points)
3. Calculate the monthly return standard deviation for each stock. (3 points)
4. Calculate the total percentage return (referred to in the text as the holding period return) for each

stock based on purchasing a share at the end of December 2011 and holding it through the end of December 2015. In your calculations assume that any dividends are reinvested immediately in the stock rather than being stuffed under a mattress where they would earn no further returns. (3 points) e. If you constructed a portfolio at the end of December 2011 consisting of 100 shares of each stock and held this portfolio through the end of December 2015 (again, reinvesting all dividends), what would be the total percentage return on the portfolio? What would the portfolio?s geometric average monthly return be? (3 points)

To answer questions 4 through 6, you will need to access the tab labeled ?Stock return data for Q4-Q6? in the previously downloaded spreadsheet. The tab contains monthly stock returns for Apple (AAPL), McKesson (MCK), and Marriott (MAR) for the months from January 2011 through December 2015, along with monthly stock returns for the S&P 500 Composite Index over the same interval.

4. Using the returns on the S&P 500 Composite Index as the proxy for the overall stock market return, estimate a beta for each stock listed above in Excel. Report the betas and comment on your level of 1

confidence in each of the beta estimates given the significance level (p-values) of the t-statistics for the beta estimates in the regression models. Clearly demonstrate your understanding of beta calculations and statistical estimates. (6 points)

1. Which of the three stocks (AAPL, MCK, MAR) has the most total return variability if held in isolation? Clearly convey what measure you used to identify the amount of risk of a stock held in isolation. (3 points)
2. Which of the three stocks (AAPL, MCK, MAR) has the most systematic risk? Clearly convey what measure you used to identify the amount of systematic risk. (3 points)

Month Ending Company Name 20111230 MASTERCARD INC 20120131 MASTERCARD INC 20120229 MASTERCARD INC 20120330 MASTERCARD INC 20120430 MASTERCARD INC 20120531 MASTERCARD INC 20120629 MASTERCARD INC 20120731 MASTERCARD INC 20120831 MASTERCARD INC 20120928 MASTERCARD INC 20121031 MASTERCARD INC 20121130 MASTERCARD INC 20121231 MASTERCARD INC 20130131 MASTERCARD INC 20130228 MASTERCARD INC 20130328 MASTERCARD INC 20130430 MASTERCARD INC 20130531 MASTERCARD INC 20130628 MASTERCARD INC 20130731 MASTERCARD INC 20130830 MASTERCARD INC 20130930 MASTERCARD INC 20131031 MASTERCARD INC 20131129 MASTERCARD INC 20131231 MASTERCARD INC 20140131 MASTERCARD INC 20140228 MASTERCARD INC 20140331 MASTERCARD INC 20140430 MASTERCARD INC 20140530 MASTERCARD INC 20140630 MASTERCARD INC 20140731 MASTERCARD INC 20140829 MASTERCARD INC 20140930 MASTERCARD INC 20141031 MASTERCARD INC 20141128 MASTERCARD INC 20141231 MASTERCARD INC 20150131 MASTERCARD INC 20150228 MASTERCARD INC 20150331 MASTERCARD INC 20150430 MASTERCARD INC 20150530 MASTERCARD INC 20150630 MASTERCARD INC 20150731 MASTERCARD INC 20150829 MASTERCARD INC Split Dividend Paid During During Month Month 0.15 0.3 0.3 0.3 0.3 0.6 0.6 0.6 10 for 1 0.11 0.11 0.11 0.16 0.16 0.16 20150930 MASTERCARD INC 20151031 MASTERCARD INC 20151128 MASTERCARD INC 20151231 MASTERCARD INC 20111230 INTERNATIONAL BUSINESS MACHS COR 20120131 INTERNATIONAL BUSINESS MACHS COR 20120229 INTERNATIONAL BUSINESS MACHS COR 20120330 INTERNATIONAL BUSINESS MACHS COR 20120430 INTERNATIONAL BUSINESS MACHS COR 20120531 INTERNATIONAL BUSINESS MACHS COR 20120629 INTERNATIONAL BUSINESS MACHS COR 20120731 INTERNATIONAL BUSINESS MACHS COR 20120831 INTERNATIONAL BUSINESS MACHS COR 20120928 INTERNATIONAL BUSINESS MACHS COR 20121031 INTERNATIONAL BUSINESS MACHS COR 20121130 INTERNATIONAL BUSINESS MACHS COR 20121231 INTERNATIONAL BUSINESS MACHS COR 20130131 INTERNATIONAL BUSINESS MACHS COR 20130228 INTERNATIONAL BUSINESS MACHS COR 20130328 INTERNATIONAL BUSINESS MACHS COR 20130430 INTERNATIONAL BUSINESS MACHS COR 20130531 INTERNATIONAL BUSINESS MACHS COR 20130628 INTERNATIONAL BUSINESS MACHS COR 20130731 INTERNATIONAL BUSINESS MACHS COR 20130830 INTERNATIONAL BUSINESS MACHS COR 20130930 INTERNATIONAL BUSINESS MACHS COR 20131031 INTERNATIONAL BUSINESS MACHS COR 20131129 INTERNATIONAL BUSINESS MACHS COR 20131231 INTERNATIONAL BUSINESS MACHS COR 20140131 INTERNATIONAL BUSINESS MACHS COR 20140228 INTERNATIONAL BUSINESS MACHS COR 20140331 INTERNATIONAL BUSINESS MACHS COR 20140430 INTERNATIONAL BUSINESS MACHS COR 20140530 INTERNATIONAL BUSINESS MACHS COR 20140630 INTERNATIONAL BUSINESS MACHS COR 20140731 INTERNATIONAL BUSINESS MACHS COR 20140829 INTERNATIONAL BUSINESS MACHS COR 20140930 INTERNATIONAL BUSINESS MACHS COR 20141031 INTERNATIONAL BUSINESS MACHS COR 20141128 INTERNATIONAL BUSINESS MACHS COR 20141231 INTERNATIONAL BUSINESS MACHS COR 20150131 INTERNATIONAL BUSINESS MACHS COR 20150228 INTERNATIONAL BUSINESS MACHS COR 0.16 0.75 0.85 0.85 0.85 0.85 0.95 0.95 0.95 0.95 1.1 1.1 1.1 1.1 20150331 INTERNATIONAL BUSINESS MACHS COR 20150430 INTERNATIONAL BUSINESS MACHS COR 20150530 INTERNATIONAL BUSINESS MACHS COR 20150630 INTERNATIONAL BUSINESS MACHS COR 20150731 INTERNATIONAL BUSINESS MACHS COR 20150829 INTERNATIONAL BUSINESS MACHS COR 20150930 INTERNATIONAL BUSINESS MACHS COR 20151031 INTERNATIONAL BUSINESS MACHS COR 20151128 INTERNATIONAL BUSINESS MACHS COR 20151231 INTERNATIONAL BUSINESS MACHS COR 20111230 UNDER ARMOUR INC 20120131 UNDER ARMOUR INC 20120229 UNDER ARMOUR INC 20120330 UNDER ARMOUR INC 20120430 UNDER ARMOUR INC 20120531 UNDER ARMOUR INC 20120629 UNDER ARMOUR INC 20120731 UNDER ARMOUR INC 20120831 UNDER ARMOUR INC 20120928 UNDER ARMOUR INC 20121031 UNDER ARMOUR INC 20121130 UNDER ARMOUR INC 20121231 UNDER ARMOUR INC 20130131 UNDER ARMOUR INC 20130228 UNDER ARMOUR INC 20130328 UNDER ARMOUR INC 20130430 UNDER ARMOUR INC 20130531 UNDER ARMOUR INC 20130628 UNDER ARMOUR INC 20130731 UNDER ARMOUR INC 20130830 UNDER ARMOUR INC 20130930 UNDER ARMOUR INC 20131031 UNDER ARMOUR INC 20131129 UNDER ARMOUR INC 20131231 UNDER ARMOUR INC 20140131 UNDER ARMOUR INC 20140228 UNDER ARMOUR INC 20140331 UNDER ARMOUR INC 20140430 UNDER ARMOUR INC 20140530 UNDER ARMOUR INC 20140630 UNDER ARMOUR INC 20140731 UNDER ARMOUR INC 20140829 UNDER ARMOUR INC 20140930 UNDER ARMOUR INC 1.3 1.3 1.3 2 for 1 2 for 1 20141031 UNDER ARMOUR INC 20141128 UNDER ARMOUR INC 20141231 UNDER ARMOUR INC 20150131 UNDER ARMOUR INC 20150228 UNDER ARMOUR INC 20150331 UNDER ARMOUR INC 20150430 UNDER ARMOUR INC 20150530 UNDER ARMOUR INC 20150630 UNDER ARMOUR INC 20150731 UNDER ARMOUR INC 20150829 UNDER ARMOUR INC 20150930 UNDER ARMOUR INC 20151031 UNDER ARMOUR INC 20151128 UNDER ARMOUR INC 20151231 UNDER ARMOUR INC Price at end of Month 372.82 355.57 420.00 420.54 452.27 406.51 430.11 436.57 422.90 451.48 460.93 488.68 491.28 518.40 517.82 541.13 552.93 570.25 574.50 610.61 606.08 672.78 717.10 760.81 835.46 75.68 77.72 74.70 73.55 76.45 73.47 74.15 75.81 73.92 83.75 87.29 86.16 82.03 90.13 86.39 90.21 92.26 93.48 97.40 92.37 90.12 98.99 97.92 97.36 183.88 192.60 196.73 208.65 207.08 192.90 195.58 195.98 194.85 207.45 194.53 190.07 191.55 203.07 200.83 213.30 202.54 208.02 191.11 195.04 182.27 185.18 179.21 179.68 187.57 176.68 185.17 192.49 196.47 184.36 181.27 191.67 192.30 189.83 164.40 162.17 160.44 153.31 161.94 160.50 171.29 169.65 162.66 161.99 147.89 144.97 140.08 139.42 137.62 71.79 79.62 89.24 94.00 97.93 100.73 94.48 54.44 58.21 55.83 52.26 51.83 48.53 50.87 49.28 51.20 57.08 62.00 59.71 67.13 72.64 79.45 81.15 80.70 87.30 108.11 113.15 114.64 48.89 50.79 59.49 66.75 68.36 69.10 65.58 72.49 67.90 72.08 77.01 80.75 77.55 78.41 83.44 99.33 95.53 96.78 95.08 86.22 80.61 Month Ending Company Name 20110131 Apple (AAPL) 20110228 Apple (AAPL) 20110331 Apple (AAPL) 20110429 Apple (AAPL) 20110531 Apple (AAPL) 20110630 Apple (AAPL) 20110729 Apple (AAPL) 20110831 Apple (AAPL) 20110930 Apple (AAPL) 20111031 Apple (AAPL) 20111130 Apple (AAPL) 20111230 Apple (AAPL) 20120131 Apple (AAPL) 20120229 Apple (AAPL) 20120330 Apple (AAPL) 20120430 Apple (AAPL) 20120531 Apple (AAPL) 20120629 Apple (AAPL) 20120731 Apple (AAPL) 20120831 Apple (AAPL) 20120928 Apple (AAPL) 20121031 Apple (AAPL) 20121130 Apple (AAPL) 20121231 Apple (AAPL) 20130131 Apple (AAPL) 20130228 Apple (AAPL) 20130328 Apple (AAPL) 20130430 Apple (AAPL) 20130531 Apple (AAPL) 20130628 Apple (AAPL) 20130731 Apple (AAPL) 20130830 Apple (AAPL) 20130930 Apple (AAPL) 20131031 Apple (AAPL) 20131129 Apple (AAPL) 20131231 Apple (AAPL) 20140131 Apple (AAPL) 20140228 Apple (AAPL) 20140331 Apple (AAPL) 20140430 Apple (AAPL) 20140530 Apple (AAPL) 20140630 Apple (AAPL) 20140731 Apple (AAPL) 20140829 Apple (AAPL) 20140930 Apple (AAPL) Returns 0.051959 0.040935 -0.013314 0.004656 -0.006569 -0.03496 0.163285 -0.014469 -0.009121 0.061523 -0.055783 0.059655 0.127111 0.188311 0.105284 -0.025969 -0.010702 0.010853 0.045822 0.093539 0.002803 -0.107607 -0.012413 -0.090738 -0.144094 -0.025116 0.002855 0.000271 0.022596 -0.118303 0.141225 0.083389 -0.021481 0.096386 0.069673 0.008902 -0.107697 0.057311 0.019953 0.099396 0.078293 0.027662 0.028731 0.077092 -0.017073 Return on the S&P 500 Index 0.022646 0.031957 -0.001047 0.028495 -0.013501 -0.018258 -0.021474 -0.056791 -0.071762 0.107723 -0.005059 0.008533 0.043583 0.040589 0.031332 -0.007497 -0.062651 0.039555 0.012598 0.019763 0.024236 -0.019789 0.002847 0.007068 0.050428 0.011061 0.035988 0.018086 0.020763 -0.014999 0.049462 -0.031298 0.029749 0.044596 0.028049 0.023563 -0.035583 0.043117 0.006932 0.006201 0.02103 0.019058 -0.01508 0.037655 -0.015514 20141031 Apple (AAPL) 20141128 Apple (AAPL) 20141231 Apple (AAPL) 20150130 Apple (AAPL) 20150227 Apple (AAPL) 20150331 Apple (AAPL) 20150430 Apple (AAPL) 20150529 Apple (AAPL) 20150630 Apple (AAPL) 20150731 Apple (AAPL) 20150831 Apple (AAPL) 20150930 Apple (AAPL) 20151030 Apple (AAPL) 20151130 Apple (AAPL) 20151231 Apple (AAPL) 0.07196 0.105556 -0.071891 0.061424 0.100461 -0.031372 0.005786 0.045146 -0.037266 -0.032888 -0.066117 -0.021816 0.083409 -0.00569 -0.110228 0.023201 0.024534 -0.004189 -0.031041 0.054893 -0.017396 0.008521 0.010491 -0.021012 0.019742 -0.062581 -0.026443 0.082983 0.000505 -0.01753 20110131 Marriott Corp (MAR) 20110228 Marriott Corp (MAR) 20110331 Marriott Corp (MAR) 20110429 Marriott Corp (MAR) 20110531 Marriott Corp (MAR) 20110630 Marriott Corp (MAR) 20110729 Marriott Corp (MAR) 20110831 Marriott Corp (MAR) 20110930 Marriott Corp (MAR) 20111031 Marriott Corp (MAR) 20111130 Marriott Corp (MAR) 20111230 Marriott Corp (MAR) 20120131 Marriott Corp (MAR) 20120229 Marriott Corp (MAR) 20120330 Marriott Corp (MAR) 20120430 Marriott Corp (MAR) 20120531 Marriott Corp (MAR) 20120629 Marriott Corp (MAR) 20120731 Marriott Corp (MAR) 20120831 Marriott Corp (MAR) 20120928 Marriott Corp (MAR) 20121031 Marriott Corp (MAR) 20121130 Marriott Corp (MAR) 20121231 Marriott Corp (MAR) 20130131 Marriott Corp (MAR) 20130228 Marriott Corp (MAR) 20130328 Marriott Corp (MAR) 20130430 Marriott Corp (MAR) 20130531 Marriott Corp (MAR) 20130628 Marriott Corp (MAR) 20130731 Marriott Corp (MAR) 20130830 Marriott Corp (MAR) -0.04935 -0.004875 -0.092578 -0.00787 0.073938 -0.061359 -0.084249 -0.096 -0.069672 0.156388 0.036347 -0.047355 0.181008 0.026996 0.072846 0.032761 -0.006396 0.012658 -0.070918 0.038166 0.037686 -0.067008 -0.001645 0.027005 0.072713 -0.010005 0.070469 0.019654 -0.020437 -0.039038 0.029725 -0.033919 0.022646 0.031957 -0.001047 0.028495 -0.013501 -0.018258 -0.021474 -0.056791 -0.071762 0.107723 -0.005059 0.008533 0.043583 0.040589 0.031332 -0.007497 -0.062651 0.039555 0.012598 0.019763 0.024236 -0.019789 0.002847 0.007068 0.050428 0.011061 0.035988 0.018086 0.020763 -0.014999 0.049462 -0.031298 d 20130930 Marriott Corp (MAR) 20131031 Marriott Corp (MAR) 20131129 Marriott Corp (MAR) 20131231 Marriott Corp (MAR) 20140131 Marriott Corp (MAR) 20140228 Marriott Corp (MAR) 20140331 Marriott Corp (MAR) 20140430 Marriott Corp (MAR) 20140530 Marriott Corp (MAR) 20140630 Marriott Corp (MAR) 20140731 Marriott Corp (MAR) 20140829 Marriott Corp (MAR) 20140930 Marriott Corp (MAR) 20141031 Marriott Corp (MAR) 20141128 Marriott Corp (MAR) 20141231 Marriott Corp (MAR) 20150130 Marriott Corp (MAR) 20150227 Marriott Corp (MAR) 20150331 Marriott Corp (MAR) 20150430 Marriott Corp (MAR) 20150529 Marriott Corp (MAR) 20150630 Marriott Corp (MAR) 20150731 Marriott Corp (MAR) 20150831 Marriott Corp (MAR) 20150930 Marriott Corp (MAR) 20151030 Marriott Corp (MAR) 20151130 Marriott Corp (MAR) 20151231 Marriott Corp (MAR) 0.051763 0.071802 0.046806 0.049575 -0.001033 0.103448 0.033008 0.034095 0.06715 0.040247 0.009516 0.075568 0.007205 0.083691 0.042772 -0.009646 -0.045239 0.118121 -0.033454 -0.003362 -0.022611 -0.04616 -0.023928 -0.023413 -0.034815 0.125806 -0.073196 -0.054576 0.029749 0.044596 0.028049 0.023563 -0.035583 0.043117 0.006932 0.006201 0.02103 0.019058 -0.01508 0.037655 -0.015514 0.023201 0.024534 -0.004189 -0.031041 0.054893 -0.017396 0.008521 0.010491 -0.021012 0.019742 -0.062581 -0.026443 0.082983 0.000505 -0.01753 20110131 McKesson Corp (MCK) 20110228 McKesson Corp (MCK) 20110331 McKesson Corp (MCK) 20110429 McKesson Corp (MCK) 20110531 McKesson Corp (MCK) 20110630 McKesson Corp (MCK) 20110729 McKesson Corp (MCK) 20110831 McKesson Corp (MCK) 20110930 McKesson Corp (MCK) 20111031 McKesson Corp (MCK) 20111130 McKesson Corp (MCK) 20111230 McKesson Corp (MCK) 20120131 McKesson Corp (MCK) 20120229 McKesson Corp (MCK) 20120330 McKesson Corp (MCK) 20120430 McKesson Corp (MCK) 20120531 McKesson Corp (MCK) 20120629 McKesson Corp (MCK) 20120731 McKesson Corp (MCK) 0.068059 0.057071 -0.002901 0.050095 0.031322 -0.020558 -0.030245 -0.012204 -0.090454 0.121733 -0.000491 -0.041815 0.048903 0.024351 0.051012 0.041472 -0.045181 0.076421 -0.032213 0.022646 0.031957 -0.001047 0.028495 -0.013501 -0.018258 -0.021474 -0.056791 -0.071762 0.107723 -0.005059 0.008533 0.043583 0.040589 0.031332 -0.007497 -0.062651 0.039555 0.012598 20120831 McKesson Corp (MCK) 20120928 McKesson Corp (MCK) 20121031 McKesson Corp (MCK) 20121130 McKesson Corp (MCK) 20121231 McKesson Corp (MCK) 20130131 McKesson Corp (MCK) 20130228 McKesson Corp (MCK) 20130328 McKesson Corp (MCK) 20130430 McKesson Corp (MCK) 20130531 McKesson Corp (MCK) 20130628 McKesson Corp (MCK) 20130731 McKesson Corp (MCK) 20130830 McKesson Corp (MCK) 20130930 McKesson Corp (MCK) 20131031 McKesson Corp (MCK) 20131129 McKesson Corp (MCK) 20131231 McKesson Corp (MCK) 20140131 McKesson Corp (MCK) 20140228 McKesson Corp (MCK) 20140331 McKesson Corp (MCK) 20140430 McKesson Corp (MCK) 20140530 McKesson Corp (MCK) 20140630 McKesson Corp (MCK) 20140731 McKesson Corp (MCK) 20140829 McKesson Corp (MCK) 20140930 McKesson Corp (MCK) 20141031 McKesson Corp (MCK) 20141128 McKesson Corp (MCK) 20141231 McKesson Corp (MCK) 20150130 McKesson Corp (MCK) 20150227 McKesson Corp (MCK) 20150331 McKesson Corp (MCK) 20150430 McKesson Corp (MCK) 20150529 McKesson Corp (MCK) 20150630 McKesson Corp (MCK) 20150731 McKesson Corp (MCK) 20150831 McKesson Corp (MCK) 20150930 McKesson Corp (MCK) 20151030 McKesson Corp (MCK) 20151130 McKesson Corp (MCK) 20151231 McKesson Corp (MCK) -0.037694 -0.012398 0.084622 0.014575 0.026358 0.085293 0.010453 0.017243 -0.019822 0.075978 0.007377 0.071266 -0.008234 0.05675 0.21855 0.06262 -0.027066 0.080607 0.016513 -0.002711 -0.041796 0.12087 -0.016821 0.030342 0.017773 -0.001846 0.044897 0.037314 -0.015088 0.024424 0.076605 -0.010931 -0.012378 0.061907 -0.051343 -0.01886 -0.102961 -0.063519 -0.03367 0.06057 0.041616 0.019763 0.024236 -0.019789 0.002847 0.007068 0.050428 0.011061 0.035988 0.018086 0.020763 -0.014999 0.049462 -0.031298 0.029749 0.044596 0.028049 0.023563 -0.035583 0.043117 0.006932 0.006201 0.02103 0.019058 -0.01508 0.037655 -0.015514 0.023201 0.024534 -0.004189 -0.031041 0.054893 -0.017396 0.008521 0.010491 -0.021012 0.019742 -0.062581 -0.026443 0.082983 0.000505 -0.01753