Question: a. Calculate the long-term volatility estimate for each of the three companies. LTV T+1 T+2 T+3 T+4 T+5 Dates T+1 T+2 T+3 T+4 T+5 PEP

a. Calculate the long-term volatility estimate for each of the three companies.

begin{tabular}{|l|l|l|r|r|r|} hline Dates & PEP & multicolumn{1}{|l|}{ KDP } & multicolumn{1}{|l|}{ KO } & multicolumn{1

LTV T+1 T+2 T+3 T+4 T+5 Dates T+1 T+2 T+3 T+4 T+5 PEP PEP KDP KDP KO PORT 0.01266744 0.01154707 0.01437127 0.01045763 0.01653961 0.01260637 0.01141208 0.0143771 0.01040199 0.01656487 0.01254796 0.01127897 0.01438289 0.01035147 0.01658984 0.01249211 0.01114772 0.01438864 0.01030561 0.01661452 0.01243871 0.01101831 0.01439436 0.010264 0.01663892 KO SP500 Portfolio SP500 0.00016721 0.00018937 0.00018395 0.00011817 0.00020675 0.0001664 0.00018716 0.00018403 0.00011754 0.00020706 0.00016563 0.00018498 0.0001841 0.00011697 0.00020737 0.0001649 0.00018282 0.00018417 0.00011645 0.00020768 0.00016419 0.0001807 0.00018425 0.00011598 0.00020799

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ANSWER To calculate the longterm volatility estimate for each of the three companies we need to calculate the standard deviation of their returns over the given time period Heres how you can do it 1 C... View full answer

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