Question

Following are the price data of Telus and Roger from 2014 - 2016
Date	Telus_Adj_Price	Roger_Adj_price
2014-01-02	31.74	41.01
2014-02-03	31.94	38.13
2014-03-03	32.67	35.58
2014-04-01	33.48	38.92
2014-05-01	32.94	36.92
2014-06-02	35.54	37.91
2014-07-01	35.44	38.05
2014-08-01	32.76	36.38
2014-09-02	34.36	38.08
2014-10-01	32.63	35.45
2014-11-03	33.90	35.77
2014-12-01	36.39	38.42
2015-01-02	34.36	37.15
2015-02-02	33.52	34.22
2015-03-02	33.74	33.71
2015-04-01	32.32	32.77
2015-05-01	33.45	34.26
2015-06-01	32.94	33.17
2015-07-01	34.01	34.83
2015-08-03	33.39	34.29
2015-09-01	31.17	32.41
2015-10-01	31.02	34.03
2015-11-02	32.90	39.21
2015-12-01	31.43	38.09
2016-01-04	27.23	34.31

a) Calculate Telus's and Roger's monthly return for all months in the sample.

b) Calculate the average return and standard deviation of the monthly return for each company

c) Estimate the monthly expected return of both companies with 95% level of confidence. Convert the bounds to annual returns. Comment on the accuracy of the estimates.

d) Calculate the covariance and correlation between the companies. Graph the monthly return of Roger's over Telus's.

Answer 1