You will estimate Apple Inc.'s equity beta in this problem. Download historical data for Apple stock prices from Yahoo! Finance website. Visit the website finance.yahoo.com in a web browser. In the search box, enter ticker AAPL for Apple stock. Click on tab for Historical Data. Change time period to January 1, 2014 to January 2, 2019. Change Frequency to Monthly. Press Apply button. Then press link labeled Download Data to download a csv fifile. Similarly download historical prices for ticker SPY of an exchange traded fund on S&P 500, a proxy for market portfolio. Finally, download historical prices for ticker IRX for short-term Treasury rate, a measure of risk-free rate (note the sign in front of IRX). You will only use the columns of dates and adjusted close prices in the three csv fifiles. Combine data in a single spreadsheet to keep one column of dates and three columns of adjusted prices. For AAPL and SPY, divide each price by the price in the previous month and subtract one to calculate monthly returns. Convert returns into excess returns. For this, subtract the previous month's monthly risk-free rate. For example, the last monthly return is calculated using the prices from Dec 1, 2018 and Jan 1, 2019. To get excess return from this return, subtract the risk-free rate from Dec 1, 2018 after dividing it by 12 to convert from annual to monthly and dividing it by 100 1because it is reported as percentage. Specififically, a number of 0.6 for risk-free rate means 0.6% = 0.006 per year = 0.006/12 = 0.0005 per month. At the end of this step, you have 60 excess returns for AAPL and 60 excess returns for market.

(a) Provide a scatter plot with AAPL monthly returns on vertical axis and SPY monthly

returns on horizontal axis.

(b) Estimate beta of AAPL. You can use Excel's SLOPE function or LINEST function or

any other method or software.