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FIN 5080 Quiz 4 EC 2014 Solution




Question;This extra credit assignment is based on ?Other Topics? Handout.1. This assignment will require you to analyze time series of monthly returns. Start by retrievingMONTHLY data for the period of July 31, 2009 ? July 31, 2014 from Yahoo Finance website( for? Best Buy (ticker = BBY) (for Students with last names starting from A-H)? Ford (ticker = F) (for Students with last names starting from I-R)? IBM (ticker = IBM) (for Students with last names starting from S-Z)? (if you use the wrong company, no points will be allotted for this question)Instructions for downloading the data from Yahoo!:To obtain the monthly data, click on ?Historical Prices? on the left panel. Select Date Range.Make sure Monthly is selected and then click on ?Get Prices?. Scroll down and click on?Download to Spreadsheet?.Instructions for sorting the data by DATE:Re-sort the data so that the most previous date is at the bottom of your spreadsheet (i.e.highlight DATE columns and click on SORT, make sure ?expand the selection? is selected, thenclick on SORT and sort by Date and order by ?Oldest to Newest?).Calculating Returns:Use the ?Adjusted Close? column to obtain returns for each period. Remember that the AdjustedClose column has already adjusted the prices for dividends and stock splits so you do not haveto adjust for it again. Just use the adjusted close column to obtain the returns.11=?t?t t PPRCalculate the following:a. Average Monthly returns for Ford or IBM or BBY (based on your last name).b. Standard Deviation and variance of monthly returns for Ford or IBM or BBY (based onyour last name).2. On 30 January 2002, you bought one share of ABC for $80. On 30 January 2003, the stock split 2for 1. On 31st July 2003, the stock splits 2 for 1 and on 31st January 2004, the stock price is $25.a. Calculate the cumulative adjustment factorb. Calculate the return since you bought the stock.3. A stock has the following year-end prices and dividends:Year Price Dividends1 $43.12 -2 49.07 $0.553 51.19 0.604 47.24 0.635 56.09 0.726 67.21 0.81Calculate:a. Returns for each yearb. Arithmetic average returnsc. Geometric average returns.4. Below is the stock price and split data for ABC Company.Date Closing Price Stock Splits2000 88.452001 92.67 5 for 22002 113.872003 112 2 for 12004 115.452005 116.87 3 for 12006 121.76 1.5 for 12007 118.92008 98.66 3 for 22009 92.56a. Calculate the stock-adjusted returns for each year and its average mean, variance, andstandard deviation.b. If you bought 200 shares of this stock in the beginning of 2000, how many shares wouldyou have at the end of 2009?


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