This assignment will require you to analyze time series of monthly returns. Start by retrieving MONTHLY data for the period of 01/01/2016 - 12/31/2021 from Yahoo website for −

 S&P 500 Index (ticker: ^GSPC)

-APPLE

-TESLA

-Facebook

1) The question is asking to go to Yahoo finance website and look  the S&P 500 for Facebook, Telsa and Apple

2) Download the MONTHLY price data for the 01/01/2016-12/31/2020 period for the three securities.

3) Calculate the MONTHLY return data for the 01/01/2016-12/31/2020 period for the selected three securities.

4) Calculate the average arithmetic monthly return, variance, and standard deviation of returns for 01/01/2016-12/31/2020 period for the selected three securities.

5) Calculate the covariance and correlation of returns between Company A and Company B for the 01/01/2016-12/31/2020 period. What does the correlation indicate?

 6) Calculate the stock betas for Company A and Company B for the 01/01/2016-12/31/2020period. What do the betas indicate? Hint: What is a proxy for the market portfolio? What should go in the known-xs array and what should go in the known-ys array? 

7) Suppose you invest 50% in Company A and 50% in Company B. What is your portfolio average return and standard deviation? 

8) Compare the average return and standard deviation of Company A and Company B from #4 with the portfolio average return and standard deviation from #7. What do you observe? What can you conclude from your findings?

Answer rating: 100% (QA)

Answer Here are the stepbystep calculations for the given assignment based on the instructions provided 1 2 Retrieve and Download Monthly Price Data Y... View the full answer