What is the probability of doubling money

Assignment Help Applied Statistics

Reference no: EM132363350

Statistics Assignment -

Instructions: It needs to be completed both in Excel and in R studio. We will need 2 files (Excel file and R files). Please see the instructions below.

Download the "Stocks data review the document" dataset. The dataset contains five years of monthly time series data of stocks listed in the S&P 500 (see fig. 1). The file includes columns for the following data:

Date
Ticker (combination of letters and numbers that identifies a security in an exchange)
Company name
CUSIP (an alphanumeric ID for each security)
Monthly return
End of month stock price
Monthly traded volume (number of shares exchanged)
'sprtrn' - the monthly return of the S&P 500 index

Select one stock from the sample. For the return of this stock, do the following:

Calculate mean, median, mode, standard deviation, skewness and kurtosis.

Calculate mean and standard deviation of returns of the S&P 500 index. (Note that the same returns are copied over and over, and placed next to each stock, so you have to select a single run of 60 observations).

Answer the following questions:

Which has higher average returns, the stock you picked or the index?

Which is riskier? (i.e.: more volatile / higher standard deviation).

Generate a scatter plot with the returns of your selected stock in the y-axis and the returns of the S&P 500 in the x-axis. Just looking at the scatter plot, can you tell whether there's a relationship between these two variables?

Probability - Using the same data as above, do the following:

Select a single stock from the sample. You are allowed to use the same stock you studied in Part I.

Calculate (or copy) the stock's mean and standard deviation.

Assume that the stock returns follow a normal distribution, with mean and standard deviation you calculated.

If you were to invest in that stock, what is the probability that you lose money? That is, what is the probability of obtaining a negative return?

What is the probability of earning at least 10%? 25%? 50%?

What is the probability of doubling your money? (i.e.: return of 100% or more)

Repeat this analysis for the S&P500 Index.

Deliverables -

IMPORTANT: The analyses described above in Statistics points 2.1, 2.2, and 4, and Probability, must be made using BOTH, Excel and R.

To complete this assignment, upload the following deliverables:

Excel spreadsheet with your calculations (tidiness, please!)

R program file. I will check for functionality by running your code in my PC, so make sure it works! (Except for the path to the data file, which I will change to reflect its location in my system)

Brief summary report in a Word or PDF file containing the answers/calculations requested in Statistics points 2, 3 and 4, and Probability.

Attachment:- Statistics Assignment Files.rar

Reference no: EM132363350

Questions Cloud

How would you increase the radio coverage of a cell : How would you increase the radio coverage of a cell? List and briefly explain three methods. Discuss the pros and cons of each choice

Describe a recent and personal experience you have had : Describe an issue you have encountered while engaging in e-business. How was it resolved and how could it have been prevented?

Calculate income tax payable at 30 june 2020 : Calculate income tax payable at 30 June 2020 and provide the jounral. There are no accruals or prepayments of administration and salaries expenses at year end.

The potential impact of internet of things on healthcare : The Potential Impact of Internet of Things on Healthcare - Video and Disruption Report Assignment - create a two-minute video and written proposal

What is the probability of doubling money : What is the probability of earning at least 10%? 25%? 50%? What is the probability of doubling your money? (i.e.: return of 100% or more)

Describe the asset turnover and profit margin on sales : Choose one of the following ratios and describe how you would explain, using a specific example: current ratio, asset turnover, or profit margin on sales.

What happens to the accumulated depreciation account : Outline the rules associated with asset revaluations under the fair value model of AASB116, describing what movements are recorded.

Determine the cost of the machine that would be recorded : Determine the cost of the machine that would be recorded in the books of Alpha Ltd. Briefly justify your answer.Alpha Ltd has just purchased a machine.

Different classifications of entities for reporting purposes : HA2032 - Assessment - The different sources a company can use to raise its funds and different classifications of entities for reporting purposes.

User Account

All Pages