Assignment Problem - FIN 3150 Personal Financial Planning

Assignment Help Financial Management

Reference no: EM132392410

FIN 3150 - Personal Financial Planning

Assignment - Capital asset pricing model and required returns

You may do this assignment individually or with one other person.

1. Select two stocks that have prices available for the last five years. (You may find it more interesting if you select one stock that is relatively risky and another that is less risky.) Each stock must have traded continuously during the 5-year period. Select a proxy for "the market" (I recommend using the Standard & Poor Index, ticker symbol:

^GSPC, as the market proxy but you can choose another proxy that reflects a well- diversified portfolio that approximates the market). Obtain weekly and monthly prices for the stocks and weekly and monthly values for the market proxy for the last five years.

2. Calculate the weekly and monthly returns on the two stocks and on the market proxy.

3. Look up the beta for the two stocks on a financial reporting site such as: Bloomberg, yahoo finance, google finance, market watch, Reuters, etc. You may find it interesting to check the beta on another site as well.

4. Use a single variable regression to calculate the each stock's beta based on the

a. weekly returns on the stock and the market for the five year period.

b. monthly returns on the stock and the market for the five period.

5. Using only the last two years' returns, calculate each stock's beta based on

a. weekly returns.

b. monthly returns.

6. Comment on differences you observe in the betas in 3, 4a, 4b, 5a and 5b.

7. Obtain an estimate of the risk free interest rate (you may use, e.g., the yield on Treasury bills or Treasury notes for a maturity of your choice). Assume the expected annual return on the market is 11%, use one beta for each stock from questions 4 or 5 to determine the required (expected) return on each stock based on the capital asset pricing model.

Reference no: EM132392410

Questions Cloud

HRM 560 Managing Organizational Change Assignment Problem : HRM 560 Managing Organizational Change assignment help and solutions, Strayer University, assessment help - Describe the company in terms of industry, size.

Explain situational leadership to your vice president. : Explain situational leadership to your Vice President. Determine the appropriate leader behavior to match the employee level and explain your reasoning.

Discuss why communication skills are important : Discuss why communication skills are important to organizational success and why recruiters focus so much on finding leads with good communication skills.

Discuss the three main areas of concern in corporate finance : Discuss the three main areas of concern in corporate finance. In your opinion, which area of concern is the most difficult to address?

Assignment Problem - FIN 3150 Personal Financial Planning : Metropolitan State University of Denver- FIN 3150 - Personal Financial Planning Assignment Help and Solutons- USA- Calculate the weekly and monthly returns on.

Which became a national bestseller : She properly secured copyrights of her work. After the book became famous several people used her work, and she sued them for copyright infringement.

Generate a few good ideas without a lot of bad ideas : It is impossible to generate a few good ideas without a lot of bad ideas. Failure should be forgiven and forgotten quickly," he said during his Oct. 27

Supporting supply chain management : There are 3 primary professional organizations supporting Supply Chain Management. Pick one of them and browse their web site for information

What do you think will be some of the most important : As you identify these large innovations, discuss how they will affect your company's products or another company that you know of.

User Account

All Pages