Valuing Investments

Running head: VALUING INVESTMENTS
Valuing Investments
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1VALUING INVESTMENTS
Table of Contents
2a. Indicating how exactly yahoo uses to calculate the beta, while indicating the months returns
that is used by yahoo and determining whether we used the same data period for analysis:..........2
2b. Indicating whether we should use adjusting close price or close price for the calculation:......2
2c. Explaining about market proxy, while determining the ticker used for market proxy:.............3
3. Creating a table for the presentation:...........................................................................................3
4. Indicating whether the regression results match yahoo results:..................................................7
Reference and Bibliography:...........................................................................................................9

2VALUING INVESTMENTS
2a. Indicating how exactly yahoo uses to calculate the beta, while indicating the months
returns that is used by yahoo and determining whether we used the same data period for
analysis:
The calculation of beta is conducted by using the slope function of excel, where the
returns of the stock and the market index is used for deriving the overall value. The total months
that has been used for the calculation purpose is 36 months, as yahoo uses the monthly returns
for deriving the calculation of beta (Investexcel.net, 2015). The confirmation of the data period
cannot be suggested, as we are taking the current data from January 2019 to Jaunty 2016 for the
calculation purpose, whereas there is no information regarding the time period that is current
being used by the yahoo.com.
2b. Indicating whether we should use adjusting close price or close price for the
calculation:
The closing price is mainly used for the calculation purposes, as per the yahoo method, as
the adjusted prices does not provide the accurate level of pricing of the stock. The close price of
the stock over the period provides the relevant information regarding the price action of the
stock, which is not depicted by the adjusted closing price. Therefore, using the adjusted closing
price in the calculation will not provide adequate information about the current risk or beta of the
stock. The calculation of beta that is conducted by yahoo.com uses closing price instead of the
adjusted closing price (Furukawa et al., 2018).