The Excel file Stock Data contains monthly data for several stocks and the S&P $500$ Index $($i$.$e$.,$

the market$).$

a$.$ Compute the equation of the Characteristic Line for Dell.

b$.$ Explain what the intercept term in this equation measures relative to the market return.

c$.$ Explain what the slope term in this equation measures relative to the market return.

d$.$ Conduct a complete hypothesis test to determine if $$ is Significant.

e$.$ Conduct a complete hypothesis test to determine if $\backslash$beta is Significant.

f$.$ Compute the R$2$ value associated with this equation.

g$.$ Explain what R$2$ measures for this equation.

h$.$ Construct a graph of the Characteristic Line for Dell.

i$.$ On this graph $($using EXCEL$$s graphing features$)$ include a trendline, the

computed equation, and the R$2$ value.

ii$.$ Label the axes and include a title for the graph.

$6.$ An investment has the following cash flows:

August $21,2008$ $ $-700$

February $12,2009$ $ $+300$

October $17,2010$ $ $+400$

April $15,2011$ $ $+600$

May $28,2012$ $ $+300$

July $19,2013$ $ $+400$

November $22,2014$ $ $+200$

August $21,2015$ $ $-1800$

a$.$ Calculate the Net Present Value of this investment. Assume the annual discount rate is $15\%.$

b$.$ Create a data table and graph illustrating the impact of the discount rate on the Net Present

Value of this investment. Include a title and label the axes for the graph.

c$.$ Use Solver to determine the Internal Rate of Return$($s$)$ associated with this investment.

$7.$ Suppose the Price$/$Earnings Ratio for the S&P $500$ is $18$ and the dividend payout ratio of the S&P

$500$ is $25\%.$ The future growth rate of dividends is expected to be $2\mathrm{.}50\%.$

a$.$ Use Goal Seek or Solver to determine the dividend growth rate that would yield an

expected Market return of $7\%.$

Dell S&P $500$

$-9\mathrm{.}51\%2\mathrm{.}40\%$

$10\mathrm{.}51\%5\mathrm{.}20\%$

$7\mathrm{.}93\%4\mathrm{.}00\%$

$-7\mathrm{.}34\%-0\mathrm{.}50\%$

$-14\mathrm{.}27\%9\mathrm{.}00\%$

$3\mathrm{.}70\%1\mathrm{.}90\%$

$1\mathrm{.}78\%-0\mathrm{.}40\%$

$-15\mathrm{.}77\%-2\mathrm{.}30\%$

$-4\mathrm{.}16\%2\mathrm{.}10\%$

$-4\mathrm{.}34\%2\mathrm{.}40\%$

$-15\mathrm{.}88\%-6\mathrm{.}70\%$

$35\mathrm{.}06\%1\mathrm{.}30\%$

$21\mathrm{.}97\%2\mathrm{.}60\%$

$11\mathrm{.}46\%-2\mathrm{.}50\%$

$29\mathrm{.}49\%9\mathrm{.}80\%$

$14\mathrm{.}75\%-0\mathrm{.}70\%$

$-6\mathrm{.}92\%-0\mathrm{.}30\%$

$0\mathrm{.}00\%-9\mathrm{.}00\%$

$-25\mathrm{.}57\%-4\mathrm{.}90\%$

$21\mathrm{.}51\%-0\mathrm{.}40\%$

$23\mathrm{.}49\%6\mathrm{.}40\%$

$40\mathrm{.}97\%2\mathrm{.}70\%$

$22\mathrm{.}31\%4\mathrm{.}40\%$

$11\mathrm{.}58\%7\mathrm{.}20\%$

$12\mathrm{.}89\%2\mathrm{.}40\%$

$-17\mathrm{.}99\%0\mathrm{.}30\%$

$5\mathrm{.}87\%4\mathrm{.}30\%$

$-1\mathrm{.}01\%-4\mathrm{.}60\%$

$17\mathrm{.}36\%4\mathrm{.}70\%$

$13\mathrm{.}46\%2\mathrm{.}40\%$

$2\mathrm{.}32\%-1\mathrm{.}60\%$

$-25\mathrm{.}48\%1\mathrm{.}30\%$

$-5\mathrm{.}52\%-4\mathrm{.}00\%$

$9\mathrm{.}03\%11\mathrm{.}40\%$

$24\mathrm{.}39\%-1\mathrm{.}90\%$

$9\mathrm{.}43\%1\mathrm{.}30\%$

$4\mathrm{.}29\%-2\mathrm{.}00\%$

$8\mathrm{.}26\%2\mathrm{.}90\%$

$2\mathrm{.}36\%0\mathrm{.}50\%$

$-32\mathrm{.}56\%-1\mathrm{.}50\%$

$26\mathrm{.}91\%4\mathrm{.}00\%$

$9\mathrm{.}77\%-2\mathrm{.}00\%$

$13\mathrm{.}38\%1\mathrm{.}20\%$

$19\mathrm{.}20\%0\mathrm{.}40\%$

$7\mathrm{.}69\%3\mathrm{.}40\%$

$30\mathrm{.}62\%1\mathrm{.}30\%$

$-3\mathrm{.}64\%0\mathrm{.}70\%$

$-30\mathrm{.}54\%1\mathrm{.}40\%$

$7\mathrm{.}93\%4\mathrm{.}00\%$

$-7\mathrm{.}34\%-0\mathrm{.}50\%$

$-14\mathrm{.}27\%9\mathrm{.}00\%$

$35\mathrm{.}06\%1\mathrm{.}30\%$

$21\mathrm{.}97\%2\mathrm{.}60\%$

$11\mathrm{.}46\%-2\mathrm{.}50\%$

$12\mathrm{.}89\%2\mathrm{.}40\%$

$-17\mathrm{.}99\%0\mathrm{.}30\%$