Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Use the data provided in Sheet 3 named "Raw Data" to complete the missing items in the sheets 4 and 5 named "Monthly Return Template and "Solution Template" respectively. |
Sheet 3 " Raw Data"
Date | Closing Market Index value | Closing Price for GOOG | Closing Price for NFLX | |||
2/1/2017 | 2278.87 | 823.21 | 142.13 | GOOG is Google | ||
3/1/2017 | 2363.64 | 829.56 | 147.81 | NFLX is Netflix | ||
4/1/2017 | 2362.72 | 905.96 | 152.20 | |||
5/1/2017 | 2384.20 | 964.86 | 163.07 | |||
6/1/2017 | 2411.80 | 908.73 | 149.41 | |||
7/1/2017 | 2423.41 | 930.50 | 181.66 | |||
8/1/2017 | 2470.30 | 939.33 | 174.71 | |||
9/1/2017 | 2471.65 | 959.11 | 181.35 | |||
10/1/2017 | 2519.36 | 1016.64 | 196.43 | |||
11/1/2017 | 2575.26 | 1021.41 | 187.58 | |||
12/1/2017 | 2647.58 | 1046.40 | 191.96 | |||
1/1/2018 | 2673.61 | 1169.94 | 270.30 | |||
2/1/2018 | 2823.81 | 1104.73 | 291.38 | |||
3/1/2018 | 2713.83 | 1031.79 | 295.35 | |||
4/1/2018 | 2640.87 | 1017.33 | 312.46 | |||
5/1/2018 | 2648.05 | 1084.99 | 351.60 | |||
6/1/2018 | 2705.27 | 1115.65 | 391.43 | |||
7/1/2018 | 2718.37 | 1217.26 | 337.45 | |||
8/1/2018 | 2816.29 | 1218.19 | 367.68 | |||
9/1/2018 | 2901.52 | 1193.47 | 374.13 | |||
10/1/2018 | 2913.98 | 1076.77 | 301.78 | |||
11/1/2018 | 2711.74 | 1094.43 | 286.13 | |||
12/1/2018 | 2760.17 | 1035.61 | 267.66 | |||
1/1/2019 | 2506.85 | 1116.37 | 339.50 | |||
2/1/2019 | 2704.10 | 1119.92 | 358.10 | |||
3/1/2019 | 2784.49 | 1173.31 | 356.56 | |||
4/1/2019 | 2834.40 | 1188.48 | 370.54 | |||
5/1/2019 | 2945.83 | 1103.63 | 343.28 | |||
6/1/2019 | 2752.06 | 1080.91 | 367.32 | |||
7/1/2019 | 2941.76 | 1216.68 | 322.99 | |||
8/1/2019 | 2980.38 | 1188.10 | 293.75 | |||
9/1/2019 | 2926.46 | 1219.00 | 267.62 | |||
10/1/2019 | 2976.74 | 1260.11 | 287.41 | |||
11/1/2019 | 3037.56 | 1304.96 | 314.66 | |||
12/1/2019 | 3140.98 | 1337.02 | 323.57 | |||
1/1/2020 | 3230.78 | 1434.23 | 345.09 |
Sheet 4 Monthly Return Google & Netflix
Date | Closing Price for GOOG | Monthly Return for GOOG | Closing Price for NFLX | Monthly Return for NFLX | Closing Market Index value | Monthly Market Return |
2/1/2017 | 823.21 | 142.13 | 2278.87 | |||
3/1/2017 | 829.56 | 147.81 | 2363.64 | |||
4/1/2017 | 905.96 | 152.20 | 2362.72 | |||
5/1/2017 | 964.86 | 163.07 | 2384.20 | |||
6/1/2017 | 908.73 | 149.41 | 2411.80 | |||
7/1/2017 | 930.50 | 181.66 | 2423.41 | |||
8/1/2017 | 939.33 | 174.71 | 2470.30 | |||
9/1/2017 | 959.11 | 181.35 | 2471.65 | |||
10/1/2017 | 1016.64 | 196.43 | 2519.36 | |||
11/1/2017 | 1021.41 | 187.58 | 2575.26 | |||
12/1/2017 | 1046.40 | 191.96 | 2647.58 | |||
1/1/2018 | 1169.94 | 270.30 | 2673.61 | |||
2/1/2018 | 1104.73 | 291.38 | 2823.81 | |||
3/1/2018 | 1031.79 | 295.35 | 2713.83 | |||
4/1/2018 | 1017.33 | 312.46 | 2640.87 | |||
5/1/2018 | 1084.99 | 351.60 | 2648.05 | |||
6/1/2018 | 1115.65 | 391.43 | 2705.27 | |||
7/1/2018 | 1217.26 | 337.45 | 2718.37 | |||
8/1/2018 | 1218.19 | 367.68 | 2816.29 | |||
9/1/2018 | 1193.47 | 374.13 | 2901.52 | |||
10/1/2018 | 1076.77 | 301.78 | 2913.98 | |||
11/1/2018 | 1094.43 | 286.13 | 2711.74 | |||
12/1/2018 | 1035.61 | 267.66 | 2760.17 | |||
1/1/2019 | 1116.37 | 339.50 | 2506.85 | |||
2/1/2019 | 1119.92 | 358.10 | 2704.10 | |||
3/1/2019 | 1173.31 | 356.56 | 2784.49 | |||
4/1/2019 | 1188.48 | 370.54 | 2834.40 | |||
5/1/2019 | 1103.63 | 343.28 | 2945.83 | |||
6/1/2019 | 1080.91 | 367.32 | 2752.06 | |||
7/1/2019 | 1216.68 | 322.99 | 2941.76 | |||
8/1/2019 | 1188.10 | 293.75 | 2980.38 | |||
9/1/2019 | 1219.00 | 267.62 | 2926.46 | |||
10/1/2019 | 1260.11 | 287.41 | 2976.74 | |||
11/1/2019 | 1304.96 | 314.66 | 3037.56 | |||
12/1/2019 | 1337.02 | 323.57 | 3140.98 | |||
1/1/2020 | 1434.23 | 345.09 | 3230.78 |
Sheet 5 G & N
Date | GOOG Return | NFLX Return | Market Return | Risk-Free Return | GOOG Excess Return* | NFLX Excess Return* | Market Excess Return* | |
3/1/2017 | 0.0050 | |||||||
4/1/2017 | 0.0050 | |||||||
5/1/2017 | 0.0050 | |||||||
6/1/2017 | 0.0050 | |||||||
7/1/2017 | 0.0050 | |||||||
8/1/2017 | 0.0050 | |||||||
9/1/2017 | 0.0050 | |||||||
10/1/2017 | 0.0050 | |||||||
11/1/2017 | 0.0050 | |||||||
12/1/2017 | 0.0050 | |||||||
1/1/2018 | 0.0050 | |||||||
2/1/2018 | 0.0050 | |||||||
3/1/2018 | 0.0050 | |||||||
4/1/2018 | 0.0050 | |||||||
5/1/2018 | 0.0050 | |||||||
6/1/2018 | 0.0050 | |||||||
7/1/2018 | 0.0050 | |||||||
8/1/2018 | 0.0050 | |||||||
9/1/2018 | 0.0050 | |||||||
10/1/2018 | 0.0050 | |||||||
11/1/2018 | 0.0050 | |||||||
12/1/2018 | 0.0050 | |||||||
1/1/2019 | 0.0050 | |||||||
2/1/2019 | 0.0050 | |||||||
3/1/2019 | 0.0050 | |||||||
4/1/2019 | 0.0050 | |||||||
5/1/2019 | 0.0050 | |||||||
6/1/2019 | 0.0050 | |||||||
7/1/2019 | 0.0050 | |||||||
8/1/2019 | 0.0050 | |||||||
9/1/2019 | 0.0050 | |||||||
10/1/2019 | 0.0050 | |||||||
11/1/2019 | 0.0050 | |||||||
12/1/2019 | 0.0050 | |||||||
1/1/2020 | 0.0050 | |||||||
SECTION 3 | Average Excess Return | |||||||
Std. Deviation of Return | ||||||||
Beta | ||||||||
Covariance** | ||||||||
Portfolio | SECTION 4 | SECTION 5 | SECTION 6 | SECTION 7 | ||||
Weight on GOOG | Weight on NFLX | Portfolio Return | Portfolio Beta | Portfolio Standard Deviation**** | Portfolio Nature: Defensive/Aggressive | |||
0 | 1 | |||||||
0.1 | 0.9 | |||||||
0.2 | 0.8 | |||||||
0.3 | 0.7 | |||||||
0.4 | 0.6 | |||||||
0.5 | 0.5 | |||||||
0.6 | 0.4 | |||||||
0.7 | 0.3 | |||||||
0.8 | 0.2 | |||||||
0.9 | 0.1 | |||||||
1 | 0 | |||||||
|
||||||||
SECTION 8 | Draw a Characteristic Line*** for GOOG | |||||||
SECTION 9 | Draw a Characteristic Line*** for NFLX |
Notes:
* Excess return is the return that is earned over and above the risk-free return
** Covariance measures the combined risk of holding two stocks at the same time. It is computed by using the Covariance function in Excel
*** A characteristic line is the line of best fit which describes the scatter plot when a stock's excess return is measured on the X-Axis (Dependent variable) and the market's excess return is measured on the Y-Axis (Independent variable).
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