NSU Analyze Time Series of Monthly Returns Instructions for downloading the data from Yahoo! Website (https://finance.yahoo.com/): To obtain the monthly d

NSU Analyze Time Series of Monthly Returns Instructions for downloading the data from Yahoo! Website (https://finance.yahoo.com/):

To obtain the monthly data for each company, on Yahoo! Finance website, enter the ticker symbol under Quote Lookup. Then, click on “Historical Data”. Enter “Time Period” as given above. For “Frequency”, make sure Monthly is selected and then click on “Apply”. Click on “Download Data”.

Saving your final file:

Keep only Date and Adj Close columns for each company. Put all five sets of data in one excel file to do further analysis.

Very important: Save your final file as a .xls or .xlsx file before you start the computations. Comma delimited (.csv) files do not retain the formula and cell references after closing the file. You will receive a grade of zero if your file does not contain cell references and formula that show how you arrived at the various answers.

Calculating Returns:

Use the ‘Adj Close’ column to obtain returns for each period. Remember that the Adjusted Close column has already adjusted the prices for dividends and stock splits so you do not have to adjust for it again. Just use the adjusted close column to obtain the return R for each month t as: Rt = Adj Closet/Adj Closet-1 – 1

Hints:

Need to use stdev and not stdev.p to calculate standard deviation. Stdev.p calculates population standard deviation and not sample standard deviation. We have a sample of the data and not the entire population.
Need to use var and not var.p to calculate variance. var.p calculates population variance and not sample variance. We have a sample of the data and not the entire population.
Need to use covariance.s and not covariance.p to calculate covariance. covariance.p calculates population covariance and not sample covariance. We have a sample of the data and not the entire population.
The portfolio variance or standard deviation is not the average of all the variances of securities in the portfolio because of the benefits of diversification.

Detailed questions attached!