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

Rectification of errors, What is rectification of errors? List and explain ...

What is rectification of errors? List and explain the stages where the errors are deducted for rectification.

Optimal portfolio selection, Optimal Portfolio Selection: The next step...

Optimal Portfolio Selection: The next step involves selecting the optimal portfolio. The strategic asset allocation will have overriding importance in pension fund management.

Venture Capital, Difference between venture capital and conventional financ...

Difference between venture capital and conventional financing

Ratio analysis, How can we calculate ration analysis in financial managemen...

How can we calculate ration analysis in financial management?? Determine the ration analysis? Need assignemt help on this topic

State the second element of capital budgeting decision, State the second el...

State the second element of capital budgeting decision The second element of capital budgeting decision is the analysis of risk and uncertainty. As the benefits from investment

gaaps that are mandatory, a) Talk about in brief the various GAAPs that ar...

a) Talk about in brief the various GAAPs that are mandatory to be followed. b) What are the several components of total cost.

Operational rules for financial management, Operational Rules for Financial...

Operational Rules for Financial Management Besides features, certain operational rules are established as to the subsequent: 1) While revenue and expenses are reported;

Forward market evaluation, Forward market evaluation Net receipt in 1 m...

Forward market evaluation Net receipt in 1 month = 240000 - 140000 = $100000 Nedwen Co requires to sell dollars at an exchange rate of 1.7829 + 0.003 = $1.7832 per £ Ster

Define the concept of a real option, Define the concept of a real option. D...

Define the concept of a real option. Discuss some real options a firm can be confronted with when investing in real projects. A positive APV project is accepted under the supposi

Rejecting proposed projects when using internal rate of retu, What is the d...

What is the decision rule for accepting or rejecting proposed projects when using internal rate of return? Whenever the internal rate of return is equal or greater than to the

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