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Calculate the arithmetic mean of the monthly hprs

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Reference no: EM133121069

Using the Southwest Data Excel File (Links to an external site.), complete the following integrative practical exercises and submit for grading.

The purpose of this exercise is to provide experience in locating, understanding, and analyzing basic stock price data. The ultimate objective is to translate this data into standard measures of risk and return.

The accompanying Excel file provides you with monthly price and dividend data for Southwest (Ticker symbol: LUV) from Yahoo Finance. (If you want to see where the data came from, go to Yahoo Finance. Type in the ticker, LUV. Then, select historical prices.)

  1. Expand the spreadsheet and compute monthly HPRs for each of the 24 months using the HPR formula in Lesson 1. Make sure to include the dividends.
  2. Calculate the arithmetic mean of the monthly HPRs for Southwest.
  3. Calculate the geometric mean of the monthly HPRs for Southwest.
  4. Expand the spreadsheet to calculate the standard deviation of the monthly HPRs using an approach similar to the one illustrated in the Measuring Risk section of Lesson 1.
  5. Calculate the monthly 5% VaR using the variance-covariance approach.
  6. Calculate the annualized version of your answers from parts 2, 3 and 4. (Your answers should be the annualized versions of only the final answers of parts 2, 3 and 4, not annualized versions of each monthly HPR.)

Date

Close

Dividend

HPR

HPR +1

 

Apr-15

40.56

0

 

 

 

May-15

37.05

0

 

 

 

Jun-15

33.09

0.075

 

 

 

Jul-15

36.2

0

 

 

 

Aug-15

36.7

0.075

 

 

 

Sep-15

38.04

0

 

 

 

Oct-15

46.29

0

 

 

 

Nov-15

45.88

0

 

 

 

Dec-15

43.06

0.075

 

 

 

Jan-16

37.62

0

 

 

 

Feb-16

41.95

0

 

 

 

Mar-16

44.8

0.075

 

 

 

Apr-16

44.61

0

 

 

 

May-16

42.48

0

 

 

 

Jun-16

39.21

0.1

 

 

 

Jul-16

37.01

0

 

 

 

Aug-16

36.88

0.1

 

 

 

Sep-16

38.89

0

 

 

 

Oct-16

40.05

0

 

 

 

Nov-16

46.61

0

 

 

 

Dec-16

49.84

0.1

 

 

 

Jan-17

52.31

0

 

 

 

Feb-17

57.8

0

 

 

 

Mar-17

53.76

0.1

 

 

 

Apr-17

56.22

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Report your final results in the cells below

 

 

 

 

 

 

 

 

Arithmetic mean of monthly HPRs:

 

 

Geometric mean of monthly HPRs:

 

 

Standard deviation of monthly HPRs:

 

 

5% VaR

 

 

 

 

 

Annualized HPR (arithmetic):

 

 

 

Annualized HPR (geometric):

 

 

 

Annualized standard deviation:

 

 

 

Reference no: EM133121069

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