Calculate the average monthly holding period returns


Question 1: Use the price data from the table that follows for the Standard & Poor's 500 Index, Wal-Mart, and Target to calculate the holding period returns for the 24 month from December 2002 through November 2004.

Month and Year    S&P 500    Wal-Mart    Target
2002
November    $928.62    $53.90    34.78
December      876.99    50.51      30.00
2003
January         854.72    47.80    28.21
February        834.75    48.06    28.65
March             864.03    52.03    29.26
April               917.77    56.32    33.44
May                953.08    52.61    36.63
June                981.06    53.67    37.84
July                 989.58    55.91    38.32
August             999.31    59.17    40.60
September      1002.14    55.85    37.63
October           1049.29    58.95    39.74
November        1055.61    55.64    38.72
December        1108.55    53.05    38.40
2004
January           1131.02    53.85    37.96
February         1142.93    59.56    43.96
March             1123.93    59.69    45.04
April               1118.54    57.00    43.37
May                 1120.00    55.73    44.70
June                1134.30    52.50    42.47
July                 1099.91    53.01    43.60
August             1102.80    52.67    44.58
September       1111.39    53.20    45.25
October            1125.23    53.92    50.02
November        1180.54    52.06    51.22

Question 2: Calculate the average monthly holding period returns and the standard deviation of these returns for the S&P 500 Index, Wal-Mart, and Target.

Question 3: Plot (1) the holding-period returns for Wal-Mart against the Standard & Poor's 500 Index, and (2) the Target holding-period returns against the Standard & Poor's 500 Index.

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Finance Basics: Calculate the average monthly holding period returns
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