Q10.You are to calculate the mean and standard deviation for the rate of returns

Question

Q10.You are to calculate the mean and standard deviation for the rate of returns for IBM and GE. Use monthly values for the periodAugust 1, 2007 through August 1, 2018. Data can be obtained from the WWW as follows 1.Go to http:www.yahoo.com. Select the Finance option 2.Enter your stock's symbol (IBM and GE) one by one.3.Under the Summary tab select "Historical Data" 4.Enter the dates correctly under the ‘set date range’ for the selected stock.Make sure the time period covered is IBM and GE(August 1, 2007 through August 1, 2018). 5.Select “Historic Prices and select correct frequency (in this case monthly)”. Further,click on “Apply” tab.6.Then just belowApply tab is download the spreadsheet. Download the spreadsheet as an excel file and save it.7.Delete all the columns except“Date” and “Adjusted close” columnsfor all three stocks.Keep only one column of “Date”.8.Make sure the data is in ascending order (by date) (i.e. old date on the top and most recent date on the bottom of the “Date” column).9.Calculate the Rate ofReturns (Xt -Xt-1 ) / Xt-1for all three stocks.Calculate the Rate of Returns (Xt -Xt-1 ) / Xt-1 Determine the means and standard deviations for the rate of returns of both stocs

Explanation / Answer

I give first five rate of retuen observations

Results for rate of return

Rate of return (GE) Rate of return (IBM) 0.065089 0.013082 0.000912 -0.01426 -0.06973 -0.09421 -0.03186 0.031407 -0.03797 -0.00916

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