Calculate betas for both stocks compared to msci world index

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You would now like to evaluate the impact that the choice of index used for the market portfolio proxy has on the beta estimation process.

a. Collect monthly price data for Walgreens and Exxon Mobil for the past five years and use this information to compute monthly returns over that period.

b. Collect monthly price data for the S&P 500 index and MSCI World index (based in U.S. dollars) for the past five years and compute monthly returns for both series. (Note: You can access the information for a wide variety of different indexes under the main "Indi- ces" tab.)

c. Calculate betas for both stocks compared to the S&P 500 index.

d. Calculate betas for both stocks compared to the MSCI World index.

e. Compare the two beta estimates for each stock and explain why they would differ from one another.

Reference no: EM13923965

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