Question
In: Finance
Part 1 : Analyzing "stock market condition". (Note: Collect S&P500 index prices using Yahoo! Finance.) 1)...
Part 1 : Analyzing "stock market condition". (Note: Collect S&P500 index prices using Yahoo! Finance.)
1) Download S&P500 daily index prices from Dec 31, 2019 to Apr 30, 2020.
2) Calculate daily S&P500 index returns and daily cumulative returns over the sample period.
3) Plot the cumulative returns and analyze the plot.
Solutions
Expert Solution
We use the "Adj. Close" column because it is the price adjusted for corporate actions such as stock dividends and splits.
Daily return for each day = (current day price - previous day price) / previous day price
The calculations are as below :
The plot is below :
It can be seen from the plot that the cumulative returns dropped sharply starting in mid-February, and continued falling until late March. After this, the cumulative returns have steadily increased, and returned to nearly zero by the end of April. This is in line with the overall performance of equity markets, which have seen a sharp fall, and a rapid recovery during these periods due to the COVID scenario.
jeff jeffy answered 2 years agoRelated Solutions
Collect recent data on the stock market index (for e.g., either S&P500 or DJIA or TASI)...
Collect recent data on the stock market index (for e.g., either
S&P500 or DJIA or TASI) for a period covering a few months. Try
to identify primary trends using the technical analysis stats
discussed in the class. Can you tell whether the market currently
is in an upward or downward trend?
Compute the total return on all of these in the respective market: 1. The S&P500 stock...
Compute the total return on all of these in the respective
market:
1. The S&P500 stock index closes at 2250 at the end of
March. At the end of June, the index closes at
2475. Assume the S&P500 has a divided yield of 3%
annually.
2. The S&P500 stock index closes at 2500 at the end of
December. The following June, the index
closes at 2400. Assume the S&P500 has a divided yield of 2%
annually.
3. A Treasury bond...
Below are returns on the stock A and S&P500 index. All numbers are in decimals (-0.0222...
Below are returns on the stock A and S&P500 index. All
numbers are in decimals (-0.0222 is equivalent to -2.22%).
A
S_P500
-0.0222
0.0032
-0.0048
-0.0058
0.1333
0.0434
0.0765
0.1081
-0.0161
-0.0121
0.1250
0.1400
0.0145
0.0368
-0.0475
-0.0454
0.0430
0.0577
-0.0260
-0.1374
0.0071
0.0064
0.0249
0.0186
0.0850
0.0215
-0.0624
-0.0752
0.0933
0.0365
0.0456
0.0528
-0.0632
-0.0131
0.0450
0.0009
0.0200
0.0017
0.0280
0.0985
Suppose that the next S&P500 return will be 7%. Use the CAPM
model to calculate the expected return...
Below are returns on the stock A and S&P500 index. All numbers are in decimals (-0.0222...
Below are returns on the stock A and S&P500 index. All
numbers are in decimals (-0.0222 is equivalent to -2.22%).
A
S_P500
-0.0222
0.0032
-0.0048
-0.0058
0.1333
0.0434
0.0765
0.1081
-0.0161
-0.0121
0.1250
0.1400
0.0145
0.0368
-0.0475
-0.0454
0.0430
0.0577
-0.0260
-0.1374
0.0071
0.0064
0.0249
0.0186
0.0850
0.0215
-0.0624
-0.0752
0.0933
0.0365
0.0456
0.0528
-0.0632
-0.0131
0.0450
0.0009
0.0200
0.0017
0.0280
0.0985
Assuming normal distribution, what is the probability that the
next S&P500 return will be greater than 0?
Please...
Below are returns on the stock A and S&P500 index. All numbers are in decimals (-0.0222...
Below are returns on the stock A and S&P500 index. All
numbers are in decimals (-0.0222 is equivalent to -2.22%).
A
S_P500
-0.0222
0.0032
-0.0048
-0.0058
0.1333
0.0434
0.0765
0.1081
-0.0161
-0.0121
0.1250
0.1400
0.0145
0.0368
-0.0475
-0.0454
0.0430
0.0577
-0.0260
-0.1374
0.0071
0.0064
0.0249
0.0186
0.0850
0.0215
-0.0624
-0.0752
0.0933
0.0365
0.0456
0.0528
-0.0632
-0.0131
0.0450
0.0009
0.0200
0.0017
0.0280
0.0985
What is the sample standard deviation of the stock A
returns?
Please write an answer in decimals. For...
Below are returns on the stock A and S&P500 index. All numbers are in decimals (-0.0222...
Below are returns on the stock A and S&P500 index. All
numbers are in decimals (-0.0222 is equivalent to -2.22%).
A
S_P500
-0.0222
0.0032
-0.0048
-0.0058
0.1333
0.0434
0.0765
0.1081
-0.0161
-0.0121
0.1250
0.1400
0.0145
0.0368
-0.0475
-0.0454
0.0430
0.0577
-0.0260
-0.1374
0.0071
0.0064
0.0249
0.0186
0.0850
0.0215
-0.0624
-0.0752
0.0933
0.0365
0.0456
0.0528
-0.0632
-0.0131
0.0450
0.0009
0.0200
0.0017
0.0280
0.0985
Assuming normal distribution, what is the probability that the
next stock A return will be less than 0?...
You are analyzing the U.S. equity market based upon the S&P Industrials Index and using the...
You are analyzing the U.S. equity market based upon the S&P
Industrials Index and using the present value of free cash flow to
equity technique. Your inputs are as follows:
Beginning FCFE: $80
k = 0.07
Growth Rate:
Year
1–3:
7%
4–6:
6%
7 and beyond
5%
Assuming that the current value for the S&P Industrials
Index is 4,200, would you underweight, overweight, or market weight
the U.S. equity market? Do not round intermediate calculations.
Round your answer to the...
You are analyzing the U.S. equity market based upon the S&P Industrials Index and using the...
You are analyzing the U.S. equity market based upon the S&P
Industrials Index and using the present value of free cash flow to
equity technique. Your inputs are as follows:
Beginning FCFE: $90
k = 0.09
Growth Rate:
Year
1–3:
9%
4–6:
8%
7 and beyond
7%
Assuming that the current value for the S&P Industrials
Index is 5,500, would you underweight, overweight, or market weight
the U.S. equity market? Do not round intermediate calculations.
Round your answer to the...
You are analyzing the U.S. equity market based upon the S&P Industrials Index and using the...
You are analyzing the U.S. equity market based upon the S&P
Industrials Index and using the present value of free cash flow to
equity technique. Your inputs are as follows:
Beginning FCFE: $60
k = 0.09
Growth Rate:
Year
1–3:
9%
4–6:
7%
7 and beyond
5%
Assuming that the current value for the S&P Industrials
Index is 2,000, would you underweight, overweight, or market weight
the U.S. equity market? Do not round intermediate calculations.
Round your answer to the...
Obtain monthly adjusted close prices of S&P500 Index (symbol: ^GSPC) and Microsoft (symbol: MSFT) during December...
Obtain monthly adjusted close prices of S&P500 Index
(symbol: ^GSPC) and Microsoft (symbol: MSFT) during December 2006 –
December 2019 from Yahoo Finance. Then, using Excel, compute
monthly returns during January 2007 – December 2019. From these
returns, compute and report beta of Microsoft using the formula we
learned in class. Suppose today’s Treasury bill rate is 2% per
annum. Historically, market risk premium is estimated to be 8% per
annum. What is today’s expected return per annum of Microsoft,...
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