Risk and Return

This assignment will require you to analyze time series of monthly returns for different securities. [5 points] 1) Select three companies as follows from Yahoo! Finance website (https://finance.yahoo.com/): a) S&P 500 (ticker=^GSPC) b) Pick Company 1, a company of your choice and note the “Sector” and “Industry” to which it belongs. Hint: Go to Yahoo! Finance website, enter the ticker symbol under Quote Lookup. Then, click on “Profile” to check the sector/industry it belongs to). c) Pick Company 2 that belongs to a different sector or industry than Company 1. d) Enter the name of the two companies you selected, along with their ticker symbol and sectors, under “Mini-case 1 (State names of selected companies)” Forum. If someone else has already posted your companies then you need to pick another set of companies. Please note that, if you pick companies that have already been selected by one of your colleagues, you will receive a grade of zero for subsequent analyses in this Mini-case. [5 points] 2) Download the MONTHLY price data for the 01/01/2016 – 12/31/2020 period for the three securities. Instructions on how to download price data from Yahoo! Finance website: i. Go to Yahoo! Finance website, enter the security’s ticker symbol in “Quote Lookup” box. Then, click on “Historical Data”. Enter “Time Period” as given above. For “Frequency”, make sure Monthly is selected and then click on “Apply”. Click on “Download Data”. A ticker.csv file will be downloaded. ii. Save your file as a .xls or .xlsx file before you start anything – very important step! Comma delimited (.csv) files do not retain the formulae and cell references after closing the file. You will receive a grade of zero if your excel file does not contain cell references and formulae that show how you arrived at the various answers. iii. You only need the “Date” and “Adj Close” columns. Copy over the “Date” and “Adj Close” columns of the three securities into a single excel so you can do the analysis. (Note: the “Adj Close” column in Yahoo! Finance has already adjusted the prices for dividends and stock splits so you do not have to adjust for it again. [20 points] 3) Calculate the MONTHLY return data for the 01/01/2016 – 12/31/2020 period for the selected three securities. Note: Return for Month 2 = (Adj Close for Month 2/Adj Close for Month 1) – 1 [7 points] 4) Calculate the average arithmetic monthly return, variance, and standard deviation of returns for 01/01/2016 – 12/31/2020 period for the selected three securities. FIN 5130 Mini-case 1 Real-world Application: Risk and Return Dr. Darshana Palkar Page 2 of 2 [8 points] 5) Calculate the covariance and correlation of returns between Company A and Company B for the 01/01/2016 – 12/31/2020 period. What does the correlation indicate? [15 points] 6) Calculate the stock betas for Company A and Company B for the 01/01/2016 –12/31/2020 period. What do the betas indicate? Hint: What is a proxy for the market portfolio? What should go in the known-xs array and what should go in the known-ys array? [25 points] 7) Suppose you invest 50% in Company A and 50% in Company B. What is your portfolio average return and standard deviation? [15 points] 8) Compare the average return and standard deviation of Company A and Company B from #4 with the portfolio average return and standard deviation from #7. What do you observe? What can you conclude from your findings?

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Assignments ABC
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 10k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Customer 452483, July 5th, 2021
Thank you, great work!
Customer 452483, July 19th, 2021
Good job!! Thank you!!!
Customer 452487, September 9th, 2021
Appreciate all of your hard work! Thank you so much!!
Customer 452483, September 14th, 2021
Job WELL DONE! Thank You very much!!
Customer 452483, July 12th, 2021
Healthcare Writing & Communications
Excellent!! You’re awesome, thank you very much for all of your hard work & help!!
Customer 452483, October 24th, 2021
Thank you so much for revising this paper for me. It looks great, truly appreciate it! You're awesome :)
Customer 452483, September 14th, 2021
You're awesome! Thank you so much!
Customer 452483, July 27th, 2021
Perfect! Thank you guys for all of your great help! :)
Customer 452483, August 23rd, 2021
Introduction to Sociology
Amazing! Thank you so much for your hard work, appreciate it!!
Customer 452483, October 24th, 2021
Business and administrative studies
Great produce and on time!
Customer 452561, November 8th, 2022
English 101
Thank you guys for always being there and helping me always get a 100% on my assignments!
Customer 452483, August 16th, 2021
Customer reviews in total
Current satisfaction rate
2 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon ABC15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat