Fundamentals of Corporate Finance (4th Edition) (Berk, DeMarzo & Harford, The Corporate Finance Series)
4th Edition
ISBN: 9780134475561
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Textbook Question
Chapter 11, Problem 1DC
DATA CASE
Today is April 30, 2016, and you have just started your new with a financial planning firm. In addition to studying for all your license exams, you have been asked to review a of a client's stock portfolio to determine the risk/return profiles of 12 stocks in the Unfortunately, your small firm cannot afford the expensive databases that would provide all this information With a few simple keystrokes, but that's why they hired you.
Specifically, you have been asked to determine the monthly average returns and standard deviations for the 12 stocks for the past five years.
The stocks (with their symbols in parentheses) are:
Archer Daniels Midland (ADM) Boeing (BA) Caterpillar (CAT) Deere & co. (DE) General Mills, (GIS) eBay, Inc. (EBAY) Hershey (HSY) International Business Machines Corporation (IBM) JPMorgan Chase & co. (JPM) Microsoft (MSFT) Procter and Gamble (PG) Walmart (WMT)
1. Collect price information for each stock from Yahoo! Finance (finance.yahoo.com) as follows:
a. Enter the stock symbol. On the page for that stock, click "Historical Prices" on the left side of the page.
b. Enter the "start date" as April 1, 2011, and the "end date" as April 30, 2016, to cover the five-year period. Make sure you click "monthly" next to the date.
c. After hitting "Get Prices," scroll to the bottom of the first page and click "Download to Spreadsheet." If you are asked if you want to open or save the file, click open.
d. Copy the entire spreadsheet, Excel, and paste the Web data into a spreadsheet. Delete all the columns except the date and the adjusted close (the first and last columns).
e. Keep the Excel file open and go back to the Yahoo! Finance Web page and hit the back button. If you are asked if you want to save the data, click no.
f. When you return to the prices page, enter the next stock symbol and hit "Get Prices" again. Do not change the dates or frequency, but make sure you have the same dates for all the stocks you will download. Again, click "Download to Spread- sheet" and then open the file. Copy the last column, "Adj. Close," paste it into the Excel file and change "Adj. Close" to the stock symbol). Make sure that the first and last prices are in the same rows as the first stock.
g. Repeat these steps for the remaining 10 stocks, pasting each closing price right next to the other stocks, again making sure that the correct prices on the correct dates all appear on the same rows.
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Chapter 11 Solutions
Fundamentals of Corporate Finance (4th Edition) (Berk, DeMarzo & Harford, The Corporate Finance Series)
Ch. 11 - Prob. 1CCCh. 11 - Why do investors demand a higher return when...Ch. 11 - For what purpose do we use the average and...Ch. 11 - How does the standard deviation of historical...Ch. 11 - What is the relation between risk and return for...Ch. 11 - Prob. 6CCCh. 11 - Prob. 7CCCh. 11 - Prob. 8CCCh. 11 - Prob. 9CCCh. 11 - Does systematic or unsystematic risk require a...
Ch. 11 - What does the historical relation between...Ch. 11 - What are the components of a stock's realized...Ch. 11 - What is the intuition behind using the average...Ch. 11 - Prob. 4CTCh. 11 - How does the relationship between the average...Ch. 11 - Consider two local banks. Bank A has 100 loans...Ch. 11 - What is meant by diversification and how does it...Ch. 11 - Which of the following risks of a stock are likely...Ch. 11 - Prob. 9CTCh. 11 - Prob. 10CTCh. 11 - If you randomly select 10 stocks for a portfolio...Ch. 11 - Why doesn't the risk premium of a stock depend on...Ch. 11 - Prob. 13CTCh. 11 - DATA CASE Today is April 30, 2016, and you have...Ch. 11 - Convert these prices to monthly returns as the...Ch. 11 - Prob. 3DCCh. 11 - Prob. 4DCCh. 11 - Prob. 5DCCh. 11 - What do you notice about the average of the...Ch. 11 - Prob. 1PCh. 11 - Prob. 2PCh. 11 - Prob. 3PCh. 11 - Your portfolio consists of 100 shares of CSH and...Ch. 11 - You have just purchased a share of stock for $20....Ch. 11 - You expect KStreet Co's trade at $100 per share...Ch. 11 - The following table contains prices and dividends...Ch. 11 - Prob. 8PCh. 11 - Prob. 9PCh. 11 - Use the data in SBUX_GOOG.xlsx on MFL to answer...Ch. 11 - Download the spreadsheet from the book's Web the...Ch. 11 - Prob. 12PCh. 11 - Prob. 13PCh. 11 - Prob. 14PCh. 11 - Prob. 15PCh. 11 - Consider the following five monthly returns: a....Ch. 11 - Explain the difference between the arithmetic...Ch. 11 - Prob. 18PCh. 11 - Prob. 19PCh. 11 - Prob. 20PCh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Prob. 23PCh. 11 - You are a risk-averse investor who is considering...Ch. 11 - Consider the following 6 months of returns for 2...
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