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Assignment 1

1. Calculate daily and annualized returns for ABC Inc. for 2017-2021 using Excel functions. Compute expected returns for 2020-2021 using CAPM and suggest if the stock is advisable to buy. 2. Create an Excel database with date, daily return, and return type (very high, high, average, low) for ABC Inc. Calculate number of days in each return type category. 3. Calculate daily average returns for XYZ Inc. for 2017-2020 using Excel functions. 4. Determine number of "bullish days" where returns exceeded 2% for both ABC and XYZ stocks, and total return earned on those days. Mention Excel techniques used.

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Vijay Karuturi
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65 views2 pages

Assignment 1

1. Calculate daily and annualized returns for ABC Inc. for 2017-2021 using Excel functions. Compute expected returns for 2020-2021 using CAPM and suggest if the stock is advisable to buy. 2. Create an Excel database with date, daily return, and return type (very high, high, average, low) for ABC Inc. Calculate number of days in each return type category. 3. Calculate daily average returns for XYZ Inc. for 2017-2020 using Excel functions. 4. Determine number of "bullish days" where returns exceeded 2% for both ABC and XYZ stocks, and total return earned on those days. Mention Excel techniques used.

Uploaded by

Vijay Karuturi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Assignment 1

Complete the assignment using excel and provide your answers in a word document. Submit both
the word document and excel file

Section A
The excel file consists the trading statistics of ABC Inc for multiple years. The data comprises
of the trading date and closing price. From the data given calculate the following: - Mention
briefly the excel technique used to manage data
1. Compute the daily average return and annualized return for each of the year 2017, 2018,
2019, 2020, 2021. (Annualize using the following formula = (1+rd)250 −1
2. Given the following information, compute the expected return using the CAPM method for
the year 2020 and 2021 and suggest if it is advisable to buy the stock. Beta = 1.25; Risk free
rate is 1.608% (US 10 year yield rates). To get Rm calculate the Daily return for S&P 500 and
annualize it. Do it for 2020 and 2021.
3. (a) Prepare a database in excel consisting of the following headers date, daily return and in
parenthesis- information on days. The column information on days should consist the
following details: - Very high return day, high return day, average return day, low return day.
A day shall be called very high rerun day if it has more than 10% return, a day shall be called
very high return day if it has between 5 to 10%. A day shall be called Average return, if it has
equal to or more than 0% and less than 5% return. A day shall be called low return day if it
has less than 0%. It should like the following: -

Date Return Name


24-03-21 -2% (Low return day) ABC Inc.

(b) How many low return days are there in the dataset
(c) How many very high return days are there in the dataset
(d) How many high return days are there in the dataset
(e) How many Average return days are there in the dataset.

Section B
The excel file consists the trading statistics of XYZ Inc. The data comprises of the trading date
and closing price. From the data given calculate daily average return for the year
2017,2018,2019,2020. Mention briefly the excel technique used to manage data

Section C
An investor has bought shares both in Stock ABC and XYZ for a one period. He would like to
assess his portfolio given the days on which he has made more than two percent returns on
both stocks. He calls those days bullish if he observes a return of greater than 2% each for
both stocks.
(a) How many bullish days are there in the investment period
(b) What was the total return on both the stocks for all the bullish days. Remember he
considers a day bullish if he can earn a return more than 2% each for both stocks. Mention
briefly the excel technique used to manage data

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