Pick up a company $($Use Microsoft$-$Ticker symbol is MSFT$)($check out "How to download

equity data from Yahoo finance.docx" in Module $1)$ from Dow Jones Index $($

yahoo.finance.com$).$

You can consult with the Professor if you are not sure how to pick. Acquire "monthly" prices for

your company's stock for the last $101$ months $($about $8\mathrm{.}3$ years$)$ and provide a timeseries graph.

$(1$ point$)$

Then calculate the monthly returns in Excel and provide a histogram of the monthly returns

$($use $1\%$ intervals from $-10\%$ to $+10\%).$ What is the worst possible outcome next month $($if

history is a proxy for the future$)?$ What is the Value$-$at$-$Risk $($VAR$)$ at $95\%$ Confidence Level if you

invested $$100,000$ to this stock? How about $99\%$ VAR? $(1$ point$)$

Write down the Portfolio Theory formulas for a $3-$stock portfolio. Pick $2($Apple Stock$-$Ticker

Symbol AAPL and Tesla $($TSLA$)\_$ more stocks and acquire monthly prices for the last $101$

months. Following the Excel examples posted on Canvas$/$Modules$/$Week $1,$ calculate the

expected return and volatility of the portfolio for the next "month" assuming equal investments

into $3$ stocks. How would your answer change if the question asked the estimates for next

"year" instead? $($Hint: You need to use the "time aggregation" rule described in Sample Excel

File.$)(1\mathrm{.}5$ point$)$

Using monthly returns of last $3$ years you downloaded above, perform a linear regression to

get the BETA for your firm $($Y: Individual Stock Returns, X: Stock Market Returns$).$ Is the Beta

you computed same as reported at Yahoo Finance? If not, what do you think would be the

reason? $(1\mathrm{.}5$ point$)$