Calculate the set of daily returns

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Question:

You want to evaluate the recent investment performance for two stocks-Walgreens and Exxon Mobil-relative to the S&P 500 index.

a. Under the "Company Analysis" tab, look up the ticker symbols for Walgreens and Exxon Mobil.

b. For each firm, as well as for the S&P 500 index, download daily price information for the past year using the menu options available under the "Prices" tab for each company.

c. For each firm, calculate the set of daily returns that correspond to these daily price series.

d. Using daily returns for the past year, calculate the beta coefficient for Walgreens and Exxon Mobil compared to the S&P 500 index. (Note: You can either build your own spreadsheet model to perform these calculations or use Excel''s built-in functions for "Slope" or "Regression.")

e. Based on your results in Part d, which stock appears to be the riskiest?

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This task provides a clear working example of two proportion z test. The first problem shows the use of two tailed test and the second problem shows the use of one tailed test. The direction of the test was based on the alternative hypothesis.

Reference no: EM131449656

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