Calculate proportion of total risk in returns-systematic

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Reference no: EM131063148

Date Price spx. Price AAPL

Aug-11. 1218.89. 374.27

Sep-11. 1131.42. 370.85

Oct-11. 1253. 3 393.67

Nov-11. 1246.96. 371.71

Dec-11. 1257.6. 393.88

Jan-12. 1312.41. 443.95

Feb-12. 1365.68. 527.55

Mar-12. 1408.47. 583. 09

Apr-12. 1397.91. 567.95

May-12. 1310.33. 561.87

Jun-12. 1362.16. 567.97

Jul-12. 1379.32. 594

Aug-12. 1406.58. 649.76

Sep-12. 1440.67. 651.58

Oct-12. 1412.16. 581.47

Nov-12. 1416.18. 574.27

Dec-12. 1426.19. 522.16

Jan-13. 1498.11. 446.92

Feb-13. 1514.68. 435.62

Mar-13. 1569.19. 436.86

Apr-13. 1597.57. 436.98

May-13. 1630.74. 446.78

Jun-13. 1606.28. 393.93

Jul-13. 1685.73. 449.56

Aug-13. 1638.17. 491.7

1- calculate monthly return for AAP and the S&P using the adjusted end of month prices

2- calculate beta for AAPL using S&P 500 returns as your market index.

3- calculate covariance of AAPL's returns with those of the S&P 500 and the variance of the S&P 500 return.

4 -calculate the proportion of total risk (variance) in the returns for AAPL that is systematic and unsystematic. Which measure of risk is most relevant for investor holding AAPL only? Which measure is most relevant for an investor holding part of a well diversified portfolio? What proportion of AAPL 's total risk can be diversified?

Reference no: EM131063148

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