Question
In: Finance
Appendix 1.1: Table 1.1 - Weekly discrete rate of returns Week Date Apple Inc. (AAPL) McDonald's...
| Appendix 1.1: Table 1.1 - Weekly discrete rate of returns | |||||
| Week | Date | Apple Inc. (AAPL) | McDonald's Corporation (MCD) | Southwest Airlines Co. (LUV) | S&P 500 Index (GSPC) |
| 1 | 30-Oct-17 | ||||
| 2 | 6-Nov-17 | 1.2549% | -1.8187% | -1.1872% | -0.2141% |
| 3 | 13-Nov-17 | -2.2355% | 0.6847% | 2.2714% | -0.1336% |
| 4 | 20-Nov-17 | 2.8316% | 1.4330% | 0.7893% | 0.9140% |
| 5 | 27-Nov-17 | -2.2409% | 2.2269% | 8.6687% | 1.5293% |
| 6 | 4-Dec-17 | -0.9841% | 0.7554% | 5.6980% | 0.3512% |
| 7 | 11-Dec-17 | 2.7198% | 0.5289% | 2.3625% | 0.9168% |
| 8 | 18-Dec-17 | 0.5968% | -1.5205% | 1.9672% | 0.2814% |
| 9 | 25-Dec-17 | -3.3001% | 0.4109% | -0.7899% | -0.3626% |
| 10 | 1-Jan-18 | 3.4068% | 1.1225% | -1.7302% | 2.6010% |
| 11 | 8-Jan-18 | 1.1923% | -0.2775% | 1.6204% | 1.5708% |
| 12 | 15-Jan-18 | 0.7741% | 1.4668% | -0.4753% | 0.8635% |
| 13 | 22-Jan-18 | -3.8916% | 1.2742% | -6.5013% | 2.2265% |
| 14 | 29-Jan-18 | -6.4234% | -5.0327% | -3.4767% | -3.8547% |
| 15 | 5-Feb-18 | -2.5435% | -5.0677% | -5.4626% | -5.1620% |
| 16 | 12-Feb-18 | 10.6908% | -1.8712% | 5.0018% | 4.3011% |
| 17 | 19-Feb-18 | 1.7815% | 3.3355% | -0.4815% | 0.5519% |
| 18 | 26-Feb-18 | 0.4004% | -9.0662% | -0.3110% | -2.0402% |
| 19 | 5-Mar-18 | 2.1421% | 6.7192% | 3.2588% | 3.5418% |
| 20 | 12-Mar-18 | -1.0876% | 3.2562% | 2.2327% | -1.2402% |
| 21 | 19-Mar-18 | -7.3475% | -4.5455% | -6.8637% | -5.9502% |
| 22 | 26-Mar-18 | 1.7224% | 0.9033% | 0.9873% | 2.0326% |
| 23 | 2-Apr-18 | 0.3530% | 3.1142% | -3.4742% | -1.3783% |
| 24 | 9-Apr-18 | 3.7739% | 0.2977% | -0.3979% | 1.9900% |
| 25 | 16-Apr-18 | -5.1591% | -1.8302% | -0.5448% | 0.5210% |
| 26 | 23-Apr-18 | -2.0475% | -0.2960% | -2.2640% | -0.0086% |
| 27 | 30-Apr-18 | 13.2468% | 4.2514% | -1.4011% | -0.2431% |
| 28 | 7-May-18 | 2.5939% | 0.2181% | -0.6063% | 2.4142% |
Generate a covariance and correlation matrix of these stocks. Interprete your results.
Solutions
Expert Solution
Formula sheet
| A | B | C | D | E | F | G | H | I | J | K |
| 2 | ||||||||||
| 3 | Week | Date | Apple Inc. (AAPL) | McDonald's Corporation (MCD) | Southwest Airlines Co. (LUV) | S&P 500 Index (GSPC) | ||||
| 4 | 1 | 43038 | ||||||||
| 5 | 2 | 43045 | 0.012549 | -0.018187 | -0.011872 | -0.002141 | ||||
| 6 | 3 | 43052 | -0.022355 | 0.006847 | 0.022714 | -0.001336 | ||||
| 7 | 4 | 43059 | 0.028316 | 0.01433 | 0.007893 | 0.00914 | ||||
| 8 | 5 | 43066 | -0.022409 | 0.022269 | 0.086687 | 0.015293 | ||||
| 9 | 6 | 43073 | -0.009841 | 0.007554 | 0.05698 | 0.003512 | ||||
| 10 | 7 | 43080 | 0.027198 | 0.005289 | 0.023625 | 0.009168 | ||||
| 11 | 8 | 43087 | 0.005968 | -0.015205 | 0.019672 | 0.002814 | ||||
| 12 | 9 | 43094 | -0.033001 | 0.004109 | -0.007899 | -0.003626 | ||||
| 13 | 10 | 43101 | 0.034068 | 0.011225 | -0.017302 | 0.02601 | ||||
| 14 | 11 | 43108 | 0.011923 | -0.002775 | 0.016204 | 0.015708 | ||||
| 15 | 12 | 43115 | 0.007741 | 0.014668 | -0.004753 | 0.008635 | ||||
| 16 | 13 | 43122 | -0.038916 | 0.012742 | -0.065013 | 0.022265 | ||||
| 17 | 14 | 43129 | -0.064234 | -0.050327 | -0.034767 | -0.038547 | ||||
| 18 | 15 | 43136 | -0.025435 | -0.050677 | -0.054626 | -0.05162 | ||||
| 19 | 16 | 43143 | 0.106908 | -0.018712 | 0.050018 | 0.043011 | ||||
| 20 | 17 | 43150 | 0.017815 | 0.033355 | -0.004815 | 0.005519 | ||||
| 21 | 18 | 43157 | 0.004004 | -0.090662 | -0.00311 | -0.020402 | ||||
| 22 | 19 | 43164 | 0.021421 | 0.067192 | 0.032588 | 0.035418 | ||||
| 23 | 20 | 43171 | -0.010876 | 0.032562 | 0.022327 | -0.012402 | ||||
| 24 | 21 | 43178 | -0.073475 | -0.045455 | -0.068637 | -0.059502 | ||||
| 25 | 22 | 43185 | 0.017224 | 0.009033 | 0.009873 | 0.020326 | ||||
| 26 | 23 | 43192 | 0.00353 | 0.031142 | -0.034742 | -0.013783 | ||||
| 27 | 24 | 43199 | 0.037739 | 0.002977 | -0.003979 | 0.0199 | ||||
| 28 | 25 | 43206 | -0.051591 | -0.018302 | -0.005448 | 0.00521 | ||||
| 29 | 26 | 43213 | -0.020475 | -0.00296 | -0.02264 | -0.000086 | ||||
| 30 | 27 | 43220 | 0.132468 | 0.042514 | -0.014011 | -0.002431 | ||||
| 31 | 28 | 43227 | 0.025939 | 0.002181 | -0.006063 | 0.024142 | ||||
| 32 | ||||||||||
| 33 | Variance covariance matrix can be calculated using the co-variance formula in excel as follows: | |||||||||
| 34 | Variance covariance matrix: | |||||||||
| 35 | AAPL | MCD | LUV | GSPC | ||||||
| 36 | AAPL | =COVARIANCE.S($E$5:$E$31,E5:E31) | =COVARIANCE.S($E$5:$E$31,F5:F31) | =COVARIANCE.S($E$5:$E$31,G5:G31) | =COVARIANCE.S($E$5:$E$31,H5:H31) | =COVARIANCE.S($E$5:$E$31,H5:H31) | ||||
| 37 | MCD | =COVARIANCE.S($F$5:$F$31,E5:E31) | =COVARIANCE.S($F$5:$F$31,F5:F31) | =COVARIANCE.S($F$5:$F$31,G5:G31) | =COVARIANCE.S($F$5:$F$31,H5:H31) | |||||
| 38 | LUV | =COVARIANCE.S($G$5:$G$31,E5:E31) | =COVARIANCE.S($G$5:$G$31,F5:F31) | =COVARIANCE.S($G$5:$G$31,G5:G31) | =COVARIANCE.S($G$5:$G$31,H5:H31) | |||||
| 39 | GSPC | =COVARIANCE.S($H$5:$H$31,E5:E31) | =COVARIANCE.S($H$5:$H$31,F5:F31) | =COVARIANCE.S($H$5:$H$31,G5:G31) | =COVARIANCE.S($H$5:$H$31,H5:H31) | |||||
| 40 | ||||||||||
| 41 | Correlation matrix can be calculated using correlation matrix as follows: | |||||||||
| 42 | Correlation matrix: | |||||||||
| 43 | AAPL | MCD | LUV | GSPC | ||||||
| 44 | AAPL | =CORREL($E$5:$E$31,E5:E31) | =CORREL($E$5:$E$31,F5:F31) | =CORREL($E$5:$E$31,G5:G31) | =CORREL($E$5:$E$31,H5:H31) | =CORREL($E$5:$E$31,H5:H31) | ||||
| 45 | MCD | =CORREL($F$5:$F$31,E5:E31) | =CORREL($F$5:$F$31,F5:F31) | =CORREL($F$5:$F$31,G5:G31) | =CORREL($F$5:$F$31,H5:H31) | |||||
| 46 | LUV | =CORREL($G$5:$G$31,E5:E31) | =CORREL($G$5:$G$31,F5:F31) | =CORREL($G$5:$G$31,G5:G31) | =CORREL($G$5:$G$31,H5:H31) | |||||
| 47 | GSPC | =CORREL($H$5:$H$31,E5:E31) | =CORREL($H$5:$H$31,F5:F31) | =CORREL($H$5:$H$31,G5:G31) | =CORREL($H$5:$H$31,H5:H31) | |||||
| 48 | ||||||||||
| 49 | Variance of the stocks shows that AAPL has highest variance and hence most risky stock among the stocks. | |||||||||
| 50 | Also covariance of AAPL with the market i.e. GSPC is highest and for MCD it is lowest, | |||||||||
| 51 | which shows that APPL is most correlated with the market and MCD is least correlated with market. | |||||||||
| 52 | ||||||||||
jeff jeffy answered 2 years agoRelated Solutions
Appendix 1.1: Table 1.1 - Weekly discrete rate of returns Week Date Apple Inc. (AAPL) McDonald's...
Appendix 1.1:
Table 1.1 - Weekly discrete rate of returns
Week
Date
Apple Inc. (AAPL)
McDonald's Corporation (MCD)
Southwest Airlines Co. (LUV)
S&P 500 Index (GSPC)
1
30-Oct-17
2
6-Nov-17
1.2549%
-1.8187%
-1.1872%
-0.2141%
3
13-Nov-17
-2.2355%
0.6847%
2.2714%
-0.1336%
4
20-Nov-17
2.8316%
1.4330%
0.7893%
0.9140%
5
27-Nov-17
-2.2409%
2.2269%
8.6687%
1.5293%
6
4-Dec-17
-0.9841%
0.7554%
5.6980%
0.3512%
7
11-Dec-17
2.7198%
0.5289%
2.3625%
0.9168%
8
18-Dec-17
0.5968%
-1.5205%
1.9672%
0.2814%
9
25-Dec-17
-3.3001%
0.4109%
-0.7899%
-0.3626%
10
1-Jan-18
3.4068%
1.1225%...
Appendix 1.1: Table 1.1 - Weekly discrete rate of returns Week Date Apple Inc. (AAPL) McDonald's...
Appendix 1.1:
Table 1.1 - Weekly discrete rate of returns
Week
Date
Apple Inc. (AAPL)
McDonald's Corporation (MCD)
Southwest Airlines Co. (LUV)
S&P 500 Index (GSPC)
1
30-Oct-17
2
6-Nov-17
1.2549%
-1.8187%
-1.1872%
-0.2141%
3
13-Nov-17
-2.2355%
0.6847%
2.2714%
-0.1336%
4
20-Nov-17
2.8316%
1.4330%
0.7893%
0.9140%
5
27-Nov-17
-2.2409%
2.2269%
8.6687%
1.5293%
6
4-Dec-17
-0.9841%
0.7554%
5.6980%
0.3512%
7
11-Dec-17
2.7198%
0.5289%
2.3625%
0.9168%
8
18-Dec-17
0.5968%
-1.5205%
1.9672%
0.2814%
9
25-Dec-17
-3.3001%
0.4109%
-0.7899%
-0.3626%
10
1-Jan-18
3.4068%
1.1225%...
Appendix 1.1: Table 1.1 - Weekly discrete rate of returns Week Date Apple Inc. (AAPL) McDonald's...
Appendix 1.1:
Table 1.1 - Weekly discrete rate of returns
Week
Date
Apple Inc. (AAPL)
McDonald's Corporation (MCD)
Southwest Airlines Co. (LUV)
S&P 500 Index (GSPC)
1
30-Oct-17
2
6-Nov-17
1.2549%
-1.8187%
-1.1872%
-0.2141%
3
13-Nov-17
-2.2355%
0.6847%
2.2714%
-0.1336%
4
20-Nov-17
2.8316%
1.4330%
0.7893%
0.9140%
5
27-Nov-17
-2.2409%
2.2269%
8.6687%
1.5293%
6
4-Dec-17
-0.9841%
0.7554%
5.6980%
0.3512%
7
11-Dec-17
2.7198%
0.5289%
2.3625%
0.9168%
8
18-Dec-17
0.5968%
-1.5205%
1.9672%
0.2814%
9
25-Dec-17
-3.3001%
0.4109%
-0.7899%
-0.3626%
10
1-Jan-18
3.4068%
1.1225%...
Week Date Apple Inc. (AAPL) McDonald's Corporation (MCD) Southwest Airlines Co. (LUV) S&P 500 Index (GSPC)...
Week
Date
Apple Inc. (AAPL)
McDonald's Corporation (MCD)
Southwest Airlines Co. (LUV)
S&P 500 Index (GSPC)
1
30-Oct-17
2
6-Nov-17
1.2549%
-1.8187%
-1.1872%
-0.2141%
3
13-Nov-17
-2.2355%
0.6847%
2.2714%
-0.1336%
4
20-Nov-17
2.8316%
1.4330%
0.7893%
0.9140%
5
27-Nov-17
-2.2409%
2.2269%
8.6687%
1.5293%
6
4-Dec-17
-0.9841%
0.7554%
5.6980%
0.3512%
7
11-Dec-17
2.7198%
0.5289%
2.3625%
0.9168%
8
18-Dec-17
0.5968%
-1.5205%
1.9672%
0.2814%
9
25-Dec-17
-3.3001%
0.4109%
-0.7899%
-0.3626%
10
1-Jan-18
3.4068%
1.1225%
-1.7302%
2.6010%
11
8-Jan-18
1.1923%
-0.2775%
1.6204%
1.5708%
12
15-Jan-18...
Please answer the following questions for the Apple, Inc. (NASDAQ: AAPL) . Balance Sheet 1) Did...
Please answer the following questions for the Apple,
Inc. (NASDAQ: AAPL) .
Balance Sheet
1) Did its total assets increase or decrease over the last
year?
Cash Flow Statement
1) Did the company have a cash inflow or outflow from operating
activities? What two major item(s) reported in operating activities
caused the major inflow and the major outflow
2)Was there total inflow or outflow of cash, what did
this most relate to (Investing, Financing or Operating)?
Please answer the following questions for the Apple, Inc. (NASDAQ: AAPL) . General information: 1)What was...
Please answer the following questions for the
Apple, Inc. (NASDAQ: AAPL) .
General information:
1)What was the market value for one share of the
company’s common stock at the conclusion of trading on February 28,
2013?
2)Who is the corporation’s independent auditor and in
what city is it located?
3) Does the auditor believe the financial statements
were presented fairly? What statements in the auditor’s report
support your conclusion?
4) Does the auditor think the company’s internal
control system is...
The table below is a discrete probability distribution of study hours for mathematics in a given week.
The table below is a discrete probability distribution of study hours for mathematics in a given week.
Hours (x)
1
2
3
4
5
P(x)
0.16
0.22
?
0.20
0.14
Find the probability of x=3.
Find the mean and the standard deviation of this probability distribution.
Find the probability that x is at most 4 hours.
TABLE 1.1: Factual Basis for Evaluating the Economic Losses of Jackson L. Brown 1 Date of...
TABLE 1.1: Factual
Basis for Evaluating the Economic Losses of Jackson L. Brown
1
Date of Birth
2/15/1960
2
Date of Death
9/6/1988
3
Age at time of death
28.66
4
Worklife Expextancy as of 9/6/88
31
5
Life Expectancy as of 9/6/88
44.54
6
Marital Status
Married
7
Sex
Male
8
Race
White
9
Education
High School Graduate
10
Occupation
Window Washer
11
Expected Trial Date
12/1/1989
12
Earning at time of death
25,000
13
Benefits
28.00%
14
Expected...
Apple Inc. has the following outstanding bond : coupon rate: 6% Maturity date : 10/15/2041 what...
Apple Inc. has the following outstanding bond :
coupon rate: 6%
Maturity date : 10/15/2041
what is is the size of each of the company's coupon payment?
Assume annual coupons. round to nearest $.
Q#1. According to the Wall Street Journal (WSJ), Apple, Inc. (AAPL) announced in 2013 a 7-for-1 stock...
Q#1. According to the Wall Street Journal (WSJ),
Apple, Inc. (AAPL) announced in 2013 a 7-for-1 stock split.
Similarly, many other publicly traded companies have announced
stocks splits. Most stock holders as well as some analysts and
traders believe that a stock split would definitely benefit current
shareholders and raise the firm’s overall market value. You read in
chapter 14 that, in theory, a 7:1 split would increase the number
of outstanding shares seven fold and cut down the post-split stock...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Flexible Budgeting and Variance Analysis I Love My Chocolate Company makes dark chocolate and light chocolate....
- this should be written in Java- Problem: Min/Max Search by Index Develop a program that, given...
- 2.the stock of Business Adventures sells for $70 a share. Its likely dividend payout and end-of-year...
- Provide TWO specific strategies that an equipment designer could employ to reduce heating of the temperature-sensitive...
- For fatty acid synthesis what would be the substrate if you are making an even number...
- Write a javascript program that computes the total cost for a five year car lease. The...
- sara is a 50-year-old woman who lives in a poor village in india. unfortunately, sara’s health...
ADVERTISEMENT