[jewey]

What is Apple's beta given the 36-month data specified for this project?
Interpret your calculated beta. What does this figure show? Explain.
Go to http://finance.yahoo.com/ and find and report the latest beta value available for Apple given at that sight. To do this, once you have entered the symbol of Apple, click on Profile and scroll down to see the beta value for the company. What is the latest beta for Apple? (State the date when you observed such beta in your report). Now, compare your calculated beta for the company with the latest beta. Are there any significant differences? What might explain such a difference, if any at all? Explain.

[jewey]

As you may suspect, the equation for the CAPM is the equation for a straight line: Y=a+bX . In other words, once we have the needed information, we can use simple regression analysis to arrive at a beta (regression coefficient) for a given stock. To do so, we need two sets of data over a given time period: Rates of returns for both a stock and "the market"- as represented by either DJI or S&P Indices- over the same time. This project requires you to conduct a regression analysis using Excel and to find the beta for the publicly-traded Apple Computers Corporation. You will also be asked to demonstrate your understanding of some of the key investment-related issues.


To get started on the project you are being provided with the information that need. (Tabled Data Below). As you see from the following pages, using Yahoo Finance at http://finance.yahoo.com/ , you are given the monthly stock prices for both Apple and DJIA. The two data sets given here contain over 40 monthly prices (covering over 3.5 years of stock price data). You need 37 such observations covering January 2000 through January 2003 to finish your project. Furthermore, you may actually go to the above site and download such data in Excel Spreadsheet format. This saves you time for entering data manually. The ticker symbol for Apple is AAPL and for DJI is DJI. Use Yahoo Finance’s “Historical Prices” hot link to get the prices first and then convert such prices into returns (%) as you have learned in this class. Use the three-year times specified above. Then answer the following questions:




What is Apple's beta given the 36-month data specified for this project?
Interpret your calculated beta. What does this figure show? Explain.
Go to http://finance.yahoo.com/ and find and report the latest beta value available for Apple given at that sight. To do this, once you have entered the symbol of Apple, click on Profile and scroll down to see the beta value for the company. What is the latest beta for Apple? (State the date when you observed such beta in your report). Now, compare your calculated beta for the company with the latest beta. Are there any significant differences? What might explain such a difference, if any at all? Explain.
By going back to http://finance.yahoo.com/, find the latest value for Microsoft. MS’ symbol is MSFT. Compare the two betas. Why are the two betas different? Explain.
Plug the two betas you just looked up in the CAPM equation and find the required rates of return for both Apple and Microsoft. You may use 12% as the market rate of return (km) and use the current yields on 10-year T-Notes as the risk-free rate (krf). What do these required rates tell potential investors interested in Apple and Microsoft? Explain your thoughts.

Please submit your assignment.


HISTORICAL MARKET “PRICES” AS REPRESENTED BY THE DJIA INDEX



Date
Open
High
Low
Close
Volume
Adj. Close*

Jul 03
8,983.66
9,068.05
8,843.61
9,040.95
29,204,000
9,040.95

Jun 03
8,851.45
9,406.50
8,823.51
8,985.44
15,622,190
8,985.44

May 03
8,478.48
8,897.04
8,328.55
8,850.26
15,543,285
8,850.26

Apr 03
7,992.83
8,587.72
7,947.38
8,480.09
14,985,771
8,480.09

Mar 03
7,890.24
8,552.08
7,397.31
7,992.13
15,035,966
7,992.13

Feb 03
8,053.74
8,189.35
7,602.81
7,891.08
14,004,526
7,891.08

Jan 03
8,342.38
8,896.09
7,884.66
8,053.81
15,394,338
8,053.81

Dec 02
8,902.95
9,076.35
8,214.93
8,341.63
12,896,257
8,341.63

Nov 02
8,395.64
8,995.78
8,237.65
8,896.09
14,881,610
8,896.09

Oct 02
7,593.04
8,607.04
7,181.47
8,397.03
17,172,873
8,397.03

Sep 02
8,659.27
8,767.82
7,422.28
7,591.93
14,739,590
7,591.93

Aug 02
8,732.60
9,129.10
7,991.40
8,663.50
13,740,136
8,663.50

Jul 02
9,239.30
9,433.10
7,489.50
8,736.60
20,126,400
8,736.60

Jun 02
9,923.90
10,016.00
8,831.90
9,243.30
15,210,395
9,243.30

May 02
9,944.90
10,400.60
9,749.70
9,925.30
12,796,136
9,925.30

Apr 02
10,402.10
10,437.40
9,767.20
9,946.20
13,726,136
9,946.20

Mar 02
10,111.00
10,728.90
10,086.50
10,403.90
13,855,400
10,403.90

Feb 02
9,923.00
10,315.70
9,503.50
10,106.10
14,442,000
10,106.10

Jan 02
10,021.70
10,345.40
9,443.30
9,920.00
14,906,285
9,920.00

Dec 01
9,848.90
10,220.80
9,651.90
10,021.60
13,036,085
10,021.60

Nov 01
9,087.50
10,054.60
8,987.60
9,851.60
13,177,904
9,851.60

Oct 01
8,846.00
9,626.50
8,659.90
9,075.10
13,610,339
9,075.10

Sep 01
9,947.00
10,238.50
7,926.90
8,847.60
17,899,060
8,847.60

Aug 01
10,527.40
10,663.10
9,829.40
9,949.80
10,556,217
9,949.80

Jul 01
10,505.00
10,758.10
10,049.40
10,522.80
11,868,052
10,522.80

Jun 01
10,913.60
11,236.70
10,313.40
10,502.40
12,657,328
10,502.40

May 01
10,734.10
11,436.40
10,638.50
10,911.90
11,705,681
10,911.90

Apr 01
9,877.20
10,973.20
9,303.50
10,735.00
13,272,245
10,735.00

Mar 01
10,493.30
10,940.50
9,047.60
9,878.80
13,221,550
9,878.80

Feb 01
10,884.80
11,140.10
10,225.10
10,495.30
12,036,684
10,495.30

Jan 01
10,790.90
11,224.40
10,325.70
10,887.40
12,151,623
10,887.40

Dec 00
10,416.80
11,044.70
10,158.20
10,788.00
11,620,655
10,788.00

Nov 00
10,966.20
11,152.00
10,204.80
10,414.50
10,342,300
10,414.50

Oct 00
10,659.10
11,108.80
9,571.40
10,971.10
12,417,181
10,971.10

Sep 00
11,219.50
11,518.80
10,439.30
10,650.90
11,017,700
10,650.90

Aug 00
10,523.80
11,416.00
10,428.60
11,215.10
9,309,608
11,215.10

Jul 00
10,450.40
10,980.30
10,303.30
10,522.00
10,020,850
10,522.00

Jun 00
10,532.30
11,013.10
10,161.50
10,447.90
10,544,545
10,447.90

May 00
10,749.40
11,086.70
10,163.20
10,522.30
9,481,272
10,522.30

Apr 00
10,863.30
11,600.40
10,128.60
10,733.90
11,100,557
10,733.90

Mar 00
10,128.10
11,311.30
9,611.80
10,921.90
11,905,913
10,921.90

Feb 00
10,937.70
11,228.40
9,760.40
10,128.30
11,058,150
10,128.30

Jan 00
11,501.90
11,908.50
10,610.40
10,940.50
11,244,100
10,940.50


Source:
Yahoo Finance. (2005). Retreived October 14, 2004 from http://finance.yahoo.com http://finance.yahoo.com/


HISTORICAL STOCK PRICES FOR APPLE COMPUTERS



Date
Open
High
Low
Close
Volume
Adj. Close*

Jul 03
18.87
19.18
18.51
19.09
6,464,000
19.09

Jun 03
18.10
19.69
16.63
19.06
5,387,319
19.06

May 03
14.25
19.01
14.00
17.95
9,518,957
17.95

Apr 03
14.20
14.95
12.72
14.22
7,001,290
14.22

Mar 03
15.01
15.16
14.04
14.14
3,643,761
14.14

Feb 03
14.41
15.30
13.80
15.01
4,050,189
15.01

Jan 03
14.36
15.38
13.56
14.36
5,431,171
14.36

Dec 02
15.90
16.10
13.78
14.33
4,023,100
14.33

Nov 02
15.94
17.38
15.01
15.50
4,174,245
15.50

Oct 02
14.59
16.44
13.36
16.07
5,362,786
16.07

Sep 02
14.49
15.19
14.05
14.50
4,937,085
14.50

Aug 02
15.11
16.25
13.97
14.75
4,338,640
14.75

Jul 02
17.71
18.79
13.80
15.26
6,841,813
15.26

Jun 02
23.39
23.45
15.98
17.72
8,015,960
17.72

May 02
24.29
25.98
22.14
23.30
5,147,445
23.30

Apr 02
23.38
26.17
23.00
24.27
5,441,395
24.27

Mar 02
21.93
25.30
21.82
23.67
4,845,570
23.67

Feb 02
25.09
25.98
20.94
21.70
7,745,464
21.70

Jan 02
22.05
24.73
20.25
24.72
7,639,304
24.72

Dec 01
21.06
24.03
20.09
21.90
4,256,805
21.90

Nov 01
17.65
21.55
17.25
21.30
4,824,538
21.30

Oct 01
15.49
19.42
14.83
17.56
6,069,873
17.56

Sep 01
18.50
19.08
14.68
15.51
7,019,800
15.51

Aug 01
19.01
19.90
17.28
18.55
4,150,826
18.55

Jul 01
23.64
25.22
17.85
18.79
7,559,633
18.79

Jun 01
20.13
25.10
19.35
23.25
6,933,380
23.25

May 01
25.41
26.70
19.30
19.95
6,421,531
19.95

Apr 01
22.09
27.12
18.75
25.49
10,405,150
25.49

Mar 01
17.81
23.75
17.19
22.07
9,090,431
22.07

Feb 01
20.69
21.94
18.00
18.25
7,078,947
18.25

Jan 01
14.88
22.50
14.44
21.62
12,279,052
21.62

Dec 00
17.00
17.50
13.62
14.88
8,472,595
14.88

Nov 00
19.44
23.00
16.12
16.50
7,906,438
16.50

Oct 00
26.69
26.75
17.50
19.56
18,499,731
19.56

Sep 00
61.31
64.12
25.38
25.75
19,588,010
25.75

Aug 00
50.31
61.50
44.25
60.94
4,701,617
60.94

Jul 00
52.12
60.62
46.88
50.81
5,269,705
50.81

Jun 00
2:1 Stock Split

Jun 00
81.75
103.94
50.31
52.38
4,511,400
52.38

May 00
124.88
126.25
81.75
84.00
4,156,354
42.00

Apr 00
135.50
139.50
104.88
124.06
4,187,963
62.03

Mar 00
118.56
150.38
114.00
135.81
3,533,769
67.91

Feb 00
104.00
119.94
97.00
114.62
3,432,475
57.31

Jan 00
104.87
121.50
86.50
103.75
5,918,240
51.88

[Curlyben]

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