Question
In: Finance
Month Monthly Returns (%) Month Monthly Returns (%) Month Monthly Returns (%) Ended Yahoo Google S&P500...
|
Month |
Monthly Returns (%) |
Month |
Monthly Returns (%) |
Month |
Monthly Returns (%) |
||||||
|
Ended |
Yahoo |
|
S&P500 |
Ended |
Yahoo |
|
S&P500 |
Ended |
Yahoo |
|
S&P500 |
|
Dec-07 |
-13.241 |
-0.219 |
-0.692 |
Dec-06 |
-5.442 |
-5.018 |
1.403 |
Dec-05 |
-2.610 |
2.457 |
0.036 |
|
Nov-07 |
-13.794 |
-1.980 |
-4.182 |
Nov-06 |
2.544 |
1.767 |
1.899 |
Nov-05 |
8.818 |
8.806 |
3.778 |
|
Oct-07 |
15.861 |
24.632 |
1.590 |
Oct-06 |
4.193 |
18.534 |
3.257 |
Oct-05 |
9.249 |
17.595 |
-1.668 |
|
Sep-07 |
18.093 |
10.096 |
3.736 |
Sep-06 |
-12.314 |
6.174 |
2.575 |
Sep-05 |
1.561 |
10.650 |
0.810 |
|
Aug-07 |
-2.237 |
1.029 |
1.497 |
Aug-06 |
6.227 |
-2.087 |
2.376 |
Aug-05 |
-0.060 |
-0.612 |
-0.912 |
|
Jul-07 |
-14.302 |
-2.430 |
-3.097 |
Jul-06 |
-17.758 |
-7.805 |
0.616 |
Jul-05 |
-3.781 |
-2.172 |
3.717 |
|
Jun-07 |
-5.470 |
4.979 |
-1.660 |
Jun-06 |
4.463 |
12.778 |
0.133 |
Jun-05 |
-6.855 |
6.088 |
0.143 |
|
May-07 |
2.354 |
5.628 |
3.486 |
May-06 |
-3.630 |
-11.035 |
-2.875 |
May-05 |
7.826 |
26.032 |
3.179 |
|
Apr-07 |
-10.387 |
2.885 |
4.428 |
Apr-06 |
1.612 |
7.164 |
1.342 |
Apr-05 |
1.770 |
21.877 |
-1.896 |
|
Mar-07 |
1.393 |
1.938 |
1.116 |
Mar-06 |
0.624 |
7.551 |
1.244 |
Mar-05 |
5.051 |
-3.979 |
-1.769 |
|
Feb-07 |
9.007 |
-10.379 |
-1.950 |
Feb-06 |
-6.735 |
-16.188 |
0.271 |
Feb-05 |
-8.350 |
-3.900 |
2.103 |
|
Jan-07 |
10.846 |
8.908 |
1.511 |
Jan-06 |
-12.264 |
4.291 |
2.648 |
Jan-05 |
-6.555 |
1.468 |
-2.437 |
Question: (Use table above to solve)
Segregate the return data in the above table into bull and bear markets, using the S&P 500 index as the proxy for the market.
A.) What was the average return for the two companies during these two types of markets? What was the return for the S&P 500 index during those times?
B.) Using the average return measures in a), compute the beta for Yahoo and Google.
C.) According to these beta estimates, which company is riskier?
Solutions
Expert Solution
According to Beta estimates Google is more risky than Yahoo because the beta is higher for google( 1.255) with Yahoo(0.987)
| A | B | C | |||||||
| Month | Monthly Returns (%) | Using excel Average return =AVERAGE(A1:A36) | Using excel Average return =AVERAGE(B1:B36) | Using excel Average return =AVERAGE(C1:C36) | Beta of YAHOO=COVARIANCE.P(A1:A36,C1:C36)/VAR.P(C1:C36) | Beta of GOOGLE =COVARIANCE.P(B1:B36,C1:C36)/VAR.P(C1:C36) | |||
| Ended | Yahoo | S&P500 | YAHOO | S&P500 | YAHOO | ||||
| 1 | 7-Dec | -13.241 | -0.219 | -0.69 | -0.953 | 4.042 | 0.715 | 0.987 | 1.255 |
| 2 | 7-Nov | -13.794 | -1.98 | -4.18 | |||||
| 3 | 7-Oct | 15.861 | 24.632 | 1.59 | |||||
| 4 | 7-Sep | 18.093 | 10.096 | 3.736 | |||||
| 5 | 7-Aug | -2.237 | 1.029 | 1.497 | |||||
| 6 | 7-Jul | -14.302 | -2.43 | -3.1 | |||||
| 7 | 7-Jun | -5.47 | 4.979 | -1.66 | |||||
| 8 | 7-May | 2.354 | 5.628 | 3.486 | |||||
| 9 | 7-Apr | -10.387 | 2.885 | 4.428 | |||||
| 10 | 7-Mar | 1.393 | 1.938 | 1.116 | |||||
| 11 | 7-Feb | 9.007 | -10.379 | -1.95 | |||||
| 12 | 7-Jan | 10.846 | 8.908 | 1.511 | |||||
| 13 | 6-Dec | -5.442 | -5.018 | 1.403 | |||||
| 14 | 6-Nov | 2.544 | 1.767 | 1.899 | |||||
| 15 | 6-Oct | 4.193 | 18.534 | 3.257 | |||||
| 16 | 6-Sep | -12.314 | 6.174 | 2.575 | |||||
| 17 | 6-Aug | 6.227 | -2.087 | 2.376 | |||||
| 18 | 6-Jul | -17.758 | -7.805 | 0.616 | |||||
| 19 | 6-Jun | 4.463 | 12.778 | 0.133 | |||||
| 20 | 6-May | -3.63 | -11.035 | -2.88 | |||||
| 21 | 6-Apr | 1.612 | 7.164 | 1.342 | |||||
| 22 | 6-Mar | 0.624 | 7.551 | 1.244 | |||||
| 23 | 6-Feb | -6.735 | -16.188 | 0.271 | |||||
| 24 | 6-Jan | -12.264 | 4.291 | 2.648 | |||||
| 25 | 5-Dec | -2.61 | 2.457 | 0.036 | |||||
| 26 | 5-Nov | 8.818 | 8.806 | 3.778 | |||||
| 27 | 5-Oct | 9.249 | 17.595 | -1.67 | |||||
| 28 | 5-Sep | 1.561 | 10.65 | 0.81 | |||||
| 29 | 5-Aug | -0.06 | -0.612 | -0.91 | |||||
| 30 | 5-Jul | -3.781 | -2.172 | 3.717 | |||||
| 31 | 5-Jun | -6.855 | 6.088 | 0.143 | |||||
| 32 | 5-May | 7.826 | 26.032 | 3.179 | |||||
| 33 | 5-Apr | 1.77 | 21.877 | -1.9 | |||||
| 34 | 5-Mar | 5.051 | -3.979 | -1.77 | |||||
| 35 | 5-Feb | -8.35 | -3.9 | 2.103 | |||||
| 36 | 5-Jan | -6.555 | 1.468 | -2.44 | |||||
jeff jeffy answered 1 year agoRelated Solutions
Here are the total returns for the S&P500 for the first ten years of this century....
Here are the total returns for the S&P500 for the first ten
years of this century. Assume you invested $1 in the S&P500 on
January 1, 2001. Your first year's return was -11.85%.
Year Return
2001 -11.85%
2002 -21.97%
2003 28.36%
2004 10.74%
2005 4.83%
2006 15.61%
2007 5.48%
2008 -36.55%
2009 26.94%
2010 18.00% 4 points.
Q1. If you invested $1 at the beginning of the time frame
[1/1/2001], how much would it be worth five years later? Show...
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?...
Pick 6 stocks, download monthly returns on yahoo finance, calculate the standard deviation for each of...
Pick 6 stocks, download monthly returns on yahoo finance,
calculate the standard deviation for each of them and then create a
histogram in excel
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.
Use the following 5-year sample on annual returns on S&P500 index and XYZ to calculate XYZ's...
Use the following 5-year sample on annual returns on S&P500
index and XYZ to calculate XYZ's Coecient of Variation, Sharpe
ratio, and Beta. The yield-to-maturity on one-year T-Bills is
2%.
Year S&P500 XYZ
2014 0.01 0.02
2015 0.06 0.11
2016 0.02 0.05
2017 0.005 -0.01
2018 0.01 0.02
Given the monthly returns that follow: Month Portfolio Return S&P 500 Return Jan. 5.5.% 5.8% Feb....
Given the monthly returns that follow:
Month
Portfolio Return
S&P 500 Return
Jan.
5.5.%
5.8%
Feb.
-2.4
-3.3
March
-1.8
-1.5
April
2.7
2.0
May
0.7
-0.1
June
-0.9
-0.4
July
0.1
0.5
August
1.5
2.0
September
-0.8
-0.6
October
-3.2
-3.7
November
2.4
1.6
December
0.6
0.1
Calculate R2:
Alpha: %
Beta:
Average return difference (with signs): %
Average return difference (without signs) %
The company the team chose is Alphabet formally Google, and competitor is Yahoo You are a...
The company the team chose is Alphabet formally
Google, and competitor is Yahoo
You are a senior manager for the highly successful
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inception nearly 30 years ago, Fine's audit practice has
exclusively consisted of auditing private and not-for-profit
organizations. Recently, the partners have been considering an
opportunity to audit a publically-traded company for the company
your team has selected.
The primary reason Fine has not heretofore ventured
into...
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