The following are the end-of-month prices for both the Standard & Poor's 500 Index and Nike's common stock.

a. Using the data here, calculate the holding-period returns for each of the months

b. Calculate the average monthly return and the standard deviation for both the S&P 500 and Nike.
c. Develop a graph that shows the relationship between the Nike stock returns and the S&P 500 Index. (Show the Nike returns on the vertical axis and the S&P 500 Index returns on the horizontal axis as done in Figure 6-5.)
d. From your graph, describe the nature of the relationship between Nike stock returns and the returns for the S&P 500 Index.

Transcribed Image Text:

NIKE S&P 500 INDEX 2014 May June July August eptember $76.91 8838 77.13 $1,924 1,960 1,931 2,003 89.20 92.97 99.29 96.15 2,018 2,068 2,059 November December 2015 January February March April May 92.25 97.12 100.33 8.84 104.43 1,995 2,068 2,086 2.1128