Calculating investment statistics and graphing output, Financial Management

Assignment Help:

Step 1) Opportunity Set Graph:Combine 2 of your stocks (Ignore the other 2 stocksfor this step only).  Construct an investment opportunity set (the curved set) between the two risky assets.  Graph the resulting curve and on a Mean-StDev graph. Use the X Y (Scatter) option and allow the lines to cross. On the same graph also graph the capital allocation line for one of your portfolios and the risk-free asset.  The risky asset for thecapital allocation line should be a portfolio consisting of 40% of Stock 1 and 60% of stock 2.

Step 2) Regressions: Use the "data analysis" and "regression" features in Excel to complete a regression equation for each of your four stocks.  Have Excel display the regression statistics on the "Regression Output" page.  Enter the alpha, beta, and R-squared from this in your analysis table.  Also, use the "slope" function in Excel to calculate the slope of your line.  For both the regression analysis and the slope function, specify the data range for the excess return for your stocks from the "Regression Data" page as the y-variable and the data range for the excess return for the S&P index on the "Regression Data" page as your x-variable. 

Step 3) Scatter-Plots: Create a scatter-plot of each of your four stocks where the excess returns for the stock are on the y-axis and the excess returns for the S&P 500 are on the x-axis.  Have Excel display the plot on the "Scatter Plot" page. Add a trend-line line by selecting (highlighting) the data series, then right click and select "add trend-line." Also display the regression equation and the R2 value on the chart by right-clicking on the trend-line and then selecting "format trend-line."  Enter the alpha and beta from this in your analysis table.

Step 4) Complete Table: On the "Analysis" page you will need tocomplete the table of information.  Be sure to use the appropriate cell references where applicable.


Related Discussions:- Calculating investment statistics and graphing output

Day count convention, Day count convention is a system used to determ...

Day count convention is a system used to determine the number of days between two coupon dates. It is important in calculating accrued interest and present value

Assessing creditworthiness of an issuer of bond, Following are the areas an...

Following are the areas an analyst should consider while assessing the creditworthiness of an issuer. 1. Security Limitations: The bond indenture shoul

Show objections against profit maximization, Q. Show objections against pro...

Q. Show objections against profit maximization? 1) Profit cannot be ascertained well in advance to express the. Probability of return as future is Uncertain. It is not at all p

What is control risk, What is Control risk That material misstatement c...

What is Control risk That material misstatement could take place and not be detected, or prevented on a timely basis, by accounting and internal control systems. All audits

Explain the internalization theory of fdi, Normal 0 false fal...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Caselets, caselets of bajaj electronics

caselets of bajaj electronics

Objectives of financial services authority, Objectives of financial service...

Objectives of financial services authority FSMA provides four statutory objectives to FSA. They are: Market Confidence: Maintaining confidence in the financial system;

What is capital recovery, Q. What is Capital recovery? sometimes one ma...

Q. What is Capital recovery? sometimes one may be interested to find out the annual amount paid in the order to redeem a loan of a specific amount over a specific period togeth

Operating cycle and financial management, discuss the applicability of oper...

discuss the applicability of operating cycle and any other financial management in poultry business in uganda

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd