Compute monthly returns for all companies

Reference no: EM131798199

The dot-com period, roughly between 1995-2000, was characterized by extreme investor optimism for Internet-based businesses. This period was also marked by young, bold managers, who made a good deal of money by reaching consumers only over the Internet. Arguably, the dot-com boom was a case of too much too fast and was consequently followed by a crash in March 2000. Jose Menges is a business student at a California State University. For his senior seminar course, he has been asked to compare the stock performance of Internet-based companies with non-Internet-based companies during the dotcom boom-bust period. He collects monthly data on the adjusted close prices from 1999 to 2000 for four companies. Amazon (AMZN) and eBay (EBAY) are chosen to represent the Internet-based companies, whereas Coca-Cola (COKE) and Johnson and Johnson (JNJ) reflect non-Internet companies. A portion of the data is shown below; the complete data set can be found on the text website, labeled Dotcom.

Monthly Adjusted Close Prices for Four Firms, 1999-2000

Month	AMZN	EBAY	COKE	JNJ
January, 1999	58.47	11.57	44.00	33.93
February, 1999	64.06	13.92	43.80	34.13
....	....	....	....	....
December, 2000	15.56	8.25	30.84	41.86

In a report, use the sample information to:

1. Compute monthly returns for all companies for 1999 and 2000.

2. Compare the stock performance of the Internet-based companies with non-Internet based companies in the dot-com boom-bust period.

Reference no: EM131798199

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