¶ … Download stock prices companies - 22 daily closing prices company. You database obtain prices e.g. datastream, yahoo finance . Use prices September 2013 onwards. 2.Present a table companies, dates, prices returns ( %).
The 22 daily closing prices for IBM, Microsoft and Apple reflect the period from October 1 to October 30. In order to calculate the price return for each stock, the previous day closing price has been subtracted from the present day closing price and the result was divided by the present day value. The result has been multiplied by 100, to reflect a percentage price return. The formula below resumes this calculation:
R% = ((Rt-Rt-1)/Rt) * 100
The table below shows the closing prices for the three selected companies (IBM, Microsoft and Apple), as well as the percentage price returns for each of these companies, for the interval October 1 -- October 30.
IBM
Microsoft
Apple
Close Price
Price Return
Close Price
Price Return
Close Price
Price
(a) Before discussing the results for each stock in part and before drawing a conclusion in terms of which stock dominates the other, it is useful to make some general observations about the three types of stock. IBM, Microsoft and Apple are all considered blue chips, namely stocks with low risk, which yield a regular rate of return through time. In the case of the period in analysis here (October 1-October 30), this is reflected through the fact that the daily fluctuations are generally quite small, usually less than $3. The only stock that has a significant fluctuation in a day is IBM, whose closing price drops on October 17 with almost $12.
In terms of average returns, this translates in the fact that both Microsoft and Apple had moderate average returns in the analyzed period: 0.26% for Microsoft and 0.34% for Apple. IBM had a negative return (-0.18%), primarily explained with the one-day drop that has been mentioned previously (a company-related event triggered that most likely, since the other two companies gained on that day).
In terms of variance, a measure of risk, the low values for all the three stocks reflect the blue chip quality. IBM has the highest risk of the three, probably because of some of the price fluctuations (the one-day drop and a significant gain on October 29). Apple has the highest average return and the lowest variance of the three stocks that are analyzed. Given the theory discussed in class, this makes Apple the dominant investment. Since Apple dominates both Microsoft and IBM, it is thus not dominated by any of the other stock. This means that Apple is the mean-variance efficient investment.
4. Variance-covariance matrix
IBM
Microsoft
Apple
IBM
0.000362242
0.000300194
0.00021607
Microsoft
0.000300194
0.000248773
0.00017906
Apple
0.000216069
0.000179059
0.00012888
Correlations
IBM
Microsoft
Apple
Rp = -0.18* XIBM + 0.34*XAPPLE
p = (0.0192* XIBM2 + 0.0112* XAPPLE2)1/2
Combinations
Weight IBM
Weight Apple
Return (%)
Standard deviation (%)
1
1
0
-0.001789
0.019032664
2
0.8
0.2
-0.000749
0.015394489
3
0.75
0.25
-0.00049
0.014553911
4
0.6
0.4
0.0002899
0.012289349
5
0.5
0.5
0.0008096
0.011080645
6
0.4
0.6
0.0013292
0.010215465
7
0.25
0.75
0.0021087
0.009753738
8
0.2
0.8
0.0023685
0.009847496
9
0
1
0.0034077
0.011352553
(b) The companies with the lowest correlation coefficients are Microsoft and IBM.
Combinations
Weight IBM
Weight Microsoft
Return (%)
Standard deviation (%)
1
1
0
-0.001789
0.019032664
2
0.8
0.2
-0.000916
0.01554947
3
0.75
0.25
-0.000697
0.014809106
4
0.6
0.4
-4.25E-05
0.013046492
5
0.5
0.5
0.0003941
0.012359365
6
0.4
0.6
0.0008306
0.012145664
7
0.25
0.75
0.0014854
0.012750494
8
0.2
0.8
0.0017037
0.013179703
9
0
1
0.0025768
0.015772548
6. For the IBM-Apple combination, the Minimum Variance Portfolio (MVP) is for the N= 7 combination, namely for a standard deviation of 0.009754. The MEF is the line that results from joining N=7, N=8 and N=9.
For the IBM-Microsoft combination, the Minimum Variance Portfolio (MVP) is for the N= 6 combination, namely for a standard deviation of 0.012146. The MEF is the line that results from joining N=6, N=7, N=8 and N=9.
7. (a) The two curves are surprisingly similar, the main difference…
Finance Assessment of the Financial Performance of UPS and FedEx The Companies UPS FedEx Selected Financial Data Ratio Analysis Short-Term Solvency Long-Term Solvency Asset Management Profitability Market value For any investor assessing potential investments there will be an evaluation of the potential investment, looking at the financial performance using vertical and horizontal analysis. Further context may be given to any analysis by looking at firms in a boarder context for example, examining two firms together, especially where they are close comparators. This
This experience also extends to partnerships throughout the industry, for example with major hotel chains and airline groups. Expedia is able to work with those companies to package off unused capacity in exchange for superior pricing and exclusive deals on attractive packages. It must be considered that the combined effect of Expedia's experience, strong brand and high traffic, along with its ample financial might, enables the company to compete as
Alcoholic Beverage Industry Throughout the world, in all industries it is now a period of consolidation and this process is now taking place for a large number of companies from different continents and different countries, and the only reason for consolidation is the fact that they come from a common industry. The undisputed largest economy in the world is now the United States and this also contains the largest companies in
Finance Financial Management in Non-Profit Organizations Financial management of not-for-profits is comparable to financial management in the commercial sector in a lot of respects; but, certain key variations shift the focus of a not-for-profit financial manager. A for-profit company focuses on prosperity and capitalizing on shareholder value. A not-for-profit organization's main goal is not to augment shareholder value; rather it is to offer some socially attractive need on a continuing basis. Budgeting
Book v Market Understanding Financial Concepts in the Real World: Book Value v. Market Value in MAKO Surgical Corp Few economic events in recent memory have thrown the basic concept of book value vs. market value into sharper relief than the dramatic and ongoing changes in home prices across the country. Many homeowners found themselves "underwater" or "upside-down" on their mortgages, meaning that they owed more money for their homes than they
Target Retailer name, history of operation Classification of Retailer The Target Customer Competition Analysis of Store Building Promotional Techniques Method of Management Selling Methods Merchandise/Service Mix Customer Services Offered Comparison of Both Retailers' Overall Strategies Retailer name, history of operation Target Corporation Target is among the leaders in retail trading in the U.S. The company offers perishables, dry grocery, dairy and frozen items and all food items comparable to traditional supermarkets. The company has three primary types of stores -- SuperTarget, CityTarget and
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now