Question: (Expected return, standard deviation, and the capital asset pricing model) Below you have been provided the prices for Citigroup and the S&P 500 Index.
a. Calculate the monthly holding-period returns for Citigroup and the S&P 500 Index.
b. What are the average monthly returns and standard deviations for each?
c. Graph the Citigroup returns against the S&P 500 Index returns.
d. Use a spreadsheet to compute the slope of the characteristic line.
e. Interpret your findings. 6-17. (Security market line)