LOAN AMORTIZATION SCHEDULE

6.90% Annual interest rate compounded monthly

60 Number of monthly payments
29140 Amount of Loan
$575.63 Payment Amount

After the 5th payment, remaining balance owed is $27,076.03

Payment #

Payment

Principal

Interest

1
2
3
4

$575.63
$575.63
$575.63
$575.63

$408.08
$410.42
$412.78
$415.15

$167.56
$165.21
$162.85
$160.48

Balance
29140
$28,731.93
$28,321.50
$27,908.72
$27,493.57

$575.63

$417.54

$158.09

$27,076.03

6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35

$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63

$419.94
$422.36
$424.79
$427.23
$429.69
$432.16
$434.64
$437.14
$439.65
$442.18
$444.72
$447.28
$449.85
$452.44
$455.04
$457.66
$460.29
$462.94
$465.60
$468.28
$470.97
$473.68
$476.40
$479.14
$481.89
$484.66
$487.45
$490.25
$493.07
$495.91

$155.69
$153.27
$150.84
$148.40
$145.94
$143.47
$140.99
$138.49
$135.98
$133.45
$130.91
$128.35
$125.78
$123.19
$120.59
$117.97
$115.34
$112.69
$110.03
$107.35
$104.66
$101.95
$99.23
$96.49
$93.74
$90.97
$88.18
$85.38
$82.56
$79.72

$26,656.08
$26,233.72
$25,808.94
$25,381.71
$24,952.03
$24,519.87
$24,085.23
$23,648.09
$23,208.44
$22,766.25
$22,321.53
$21,874.25
$21,424.40
$20,971.96
$20,516.91
$20,059.26
$19,598.97
$19,136.03
$18,670.43
$18,202.16
$17,731.19
$17,257.52
$16,781.12
$16,301.98
$15,820.08
$15,335.42
$14,847.97
$14,357.71
$13,864.64
$13,368.73

36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60

$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63
$575.63

$498.76
$501.63
$504.51
$507.41
$510.33
$513.26
$516.22
$519.18
$522.17
$525.17
$528.19
$531.23
$534.28
$537.36
$540.45
$543.55
$546.68
$549.82
$552.98
$556.16
$559.36
$562.58
$565.81
$569.07
$572.34

$76.87
$74.00
$71.12
$68.22
$65.30
$62.37
$59.41
$56.45
$53.46
$50.46
$47.44
$44.40
$41.35
$38.27
$35.18
$32.08
$28.95
$25.81
$22.65
$19.47
$16.27
$13.05
$9.82
$6.56
$3.29

$12,869.97
$12,368.34
$11,863.83
$11,356.42
$10,846.09
$10,332.82
$9,816.61
$9,297.42
$8,775.25
$8,250.08
$7,721.89
$7,190.66
$6,656.38
$6,119.02
$5,578.58
$5,035.02
$4,488.34
$3,938.52
$3,385.54
$2,829.37
$2,270.01
$1,707.44
$1,141.62
$572.56
$0.22

Main formula for bond price

FV
Coupon Rate
YTM
Years to Maturity
Payment Freq

$1,000
7.875%
12.40%
19
1

Bond price from today untill maturity

Years to Maturity (N) Price of Bond (PV)

19
$674.68
18
$679.59
17
$685.10
16
$691.31
15
$698.28
PV(price) of bond $674.68
14
$706.12
13
$714.92
Formula used for bond price calculations:12
$724.82
11
$735.95
10
$748.46
9
$762.52
Question clearly indicated to
8
$778.32
present the price of the bond,
7
$796.08
i.e. one bond with face value of
6
$816.05
1,000$, thus we calculated prices
5
$838.49
and yields per 1 bond of the
4
$863.71
many they issued.
3
$892.06
2
$923.93
1
$959.74
0
$1,000.00

Graphical representation of bond prices over time to matuirty (19-0)

Bond Price Over Time to Maturity

1000
950
900
Price of Bond
(PV)

850
800
750
700
650
600
19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0

SP500 AVERAGE RETURNS

Date
6/1/2011
5/2/2011
4/1/2011
3/1/2011
2/1/2011
1/3/2011
12/1/2010
11/1/2010
10/1/2010
9/1/2010
8/2/2010
7/1/2010
6/1/2010
5/3/2010
4/1/2010
3/1/2010
2/1/2010
1/4/2010
12/1/2009
11/2/2009
10/1/2009
9/1/2009
8/3/2009
7/1/2009
6/1/2009
5/1/2009
4/1/2009
3/2/2009
2/2/2009
1/2/2009
12/1/2008
11/3/2008
10/1/2008
9/2/2008
8/1/2008
7/1/2008
6/2/2008
5/1/2008
4/1/2008
3/3/2008
2/1/2008
1/2/2008
12/3/2007
11/1/2007

Open
1345.2
1365.21
1329.48
1328.64
1289.14
1257.62
1186.6
1185.71
1143.49
1049.72
1107.53
1031.1
1087.3
1188.58
1171.23
1105.36
1073.89
1116.56
1098.89
1036.18
1054.91
1019.52
990.22
920.82
923.26
872.74
793.59
729.57
823.09
902.99
888.61
968.67
1164.17
1287.83
1269.42
1276.69
1399.62
1385.97
1326.41
1330.45
1378.6
1467.97
1479.63
1545.79

High
1345.2
1370.58
1364.56
1332.28
1344.07
1302.67
1262.6
1227.08
1196.14
1157.16
1129.24
1120.95
1131.23
1205.13
1219.8
1180.69
1112.42
1150.45
1130.38
1113.69
1101.36
1080.15
1039.47
996.68
956.23
930.17
888.7
832.98
875.01
943.85
918.85
1007.51
1167.03
1303.04
1313.15
1292.17
1404.05
1440.24
1404.57
1359.68
1396.02
1471.77
1523.57
1545.79

Low
1313.71
1311.8
1294.7
1249.05
1289.14
1257.62
1186.6
1173
1131.87
1049.72
1039.7
1010.91
1028.33
1040.78
1170.69
1105.36
1044.5
1071.59
1085.89
1029.38
1019.95
991.97
978.51
869.32
888.86
866.1
783.32
666.79
734.52
804.3
815.69
741.02
839.8
1106.42
1247.45
1200.44
1272
1373.07
1324.35
1256.98
1316.75
1270.05
1435.65
1406.1

Close Volume Adj Close

1314.55
### 1314.55
1345.2
###
1345.2
1363.61
### 1363.61
1325.83
### 1325.83
1327.22
### 1327.22
1286.12
### 1286.12
1257.64
### 1257.64
1180.55
### 1180.55
1183.26
### 1183.26
1141.2
###
1141.2
1049.33
### 1049.33
1101.6
###
1101.6
1030.71
### 1030.71
1089.41
### 1089.41
1186.69
### 1186.69
1169.43
### 1169.43
1104.49
### 1104.49
1073.87
### 1073.87
1115.1
###
1115.1
1095.63
### 1095.63
1036.19
### 1036.19
1057.08
### 1057.08
1020.62
### 1020.62
987.48
###
987.48
919.32
###
919.32
919.14
###
919.14
872.81
###
872.81
797.87
###
797.87
735.09
###
735.09
825.88
###
825.88
903.25
###
903.25
896.24
###
896.24
968.75
###
968.75
1166.36
### 1166.36
1282.83
### 1282.83
1267.38
### 1267.38
1280
###
1280
1400.38
### 1400.38
1385.59
### 1385.59
1322.7
###
1322.7
1330.63
### 1330.63
1378.55
### 1378.55
1468.36
### 1468.36
1481.14
### 1481.14

10/1/2007
9/4/2007
8/1/2007
7/2/2007
6/1/2007
5/1/2007
4/2/2007
3/1/2007
2/1/2007
1/3/2007
12/1/2006
11/1/2006
10/2/2006
9/1/2006
8/1/2006
7/3/2006
6/1/2006
5/1/2006
4/3/2006
3/1/2006
2/1/2006
1/3/2006
12/1/2005
11/1/2005
10/3/2005
9/1/2005
8/1/2005
7/1/2005
6/1/2005
5/2/2005
4/1/2005
3/1/2005
2/1/2005
1/3/2005
12/1/2004
11/1/2004
10/1/2004
9/1/2004
8/2/2004
7/1/2004
6/1/2004
5/3/2004
4/1/2004
3/1/2004
2/2/2004
1/2/2004
12/1/2003

1527.29
1473.96
1455.18
1504.66
1530.62
1482.37
1420.83
1406.8
1437.9
1418.03
1400.63
1377.76
1335.82
1303.8
1278.53
1270.06
1270.05
1310.61
1302.88
1280.66
1280.08
1248.29
1249.48
1207.01
1228.81
1220.33
1234.18
1191.33
1191.5
1156.85
1180.59
1203.6
1181.27
1211.92
1173.78
1130.2
1114.58
1104.24
1101.72
1140.84
1120.68
1107.3
1126.21
1144.94
1131.13
1111.92
1058.2

1576.09
1538.74
1503.89
1555.9
1540.56
1535.56
1498.02
1438.89
1461.57
1441.61
1431.81
1407.89
1389.45
1340.28
1306.74
1280.42
1290.68
1326.7
1318.16
1310.88
1297.57
1294.9
1275.8
1270.64
1233.34
1243.13
1245.86
1245.15
1219.59
1199.56
1191.88
1229.11
1212.44
1217.8
1217.33
1188.46
1142.05
1131.54
1109.68
1140.84
1146.34
1127.74
1150.57
1163.23
1158.98
1155.38
1112.56

1489.56
1439.29
1370.6
1454.25
1484.18
1476.7
1416.37
1363.98
1389.42
1403.97
1385.93
1360.98
1327.1
1290.93
1261.3
1224.54
1219.29
1245.34
1280.74
1268.42
1253.61
1245.74
1246.59
1201.07
1168.2
1205.35
1201.07
1183.55
1188.3
1146.18
1136.15
1163.69
1180.95
1163.75
1173.78
1127.6
1090.29
1099.18
1060.72
1078.78
1113.32
1076.32
1107.23
1087.16
1124.44
1105.08
1053.41

1549.38
1526.75
1473.99
1455.27
1503.35
1530.62
1482.37
1420.86
1406.82
1438.24
1418.3
1400.63
1377.94
1335.85
1303.82
1276.66
1270.2
1270.09
1310.61
1294.87
1280.66
1280.08
1248.29
1249.48
1207.01
1228.81
1220.33
1234.18
1191.33
1191.5
1156.85
1180.59
1203.6
1181.27
1211.92
1173.82
1130.2
1114.58
1104.24
1101.72
1140.84
1120.68
1107.3
1126.21
1144.94
1131.13
1111.92

###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###

1549.38
1526.75
1473.99
1455.27
1503.35
1530.62
1482.37
1420.86
1406.82
1438.24
1418.3
1400.63
1377.94
1335.85
1303.82
1276.66
1270.2
1270.09
1310.61
1294.87
1280.66
1280.08
1248.29
1249.48
1207.01
1228.81
1220.33
1234.18
1191.33
1191.5
1156.85
1180.59
1203.6
1181.27
1211.92
1173.82
1130.2
1114.58
1104.24
1101.72
1140.84
1120.68
1107.3
1126.21
1144.94
1131.13
1111.92

11/3/2003
10/1/2003
9/2/2003
8/1/2003
7/1/2003
6/2/2003
5/1/2003
4/1/2003
3/3/2003
2/3/2003
1/2/2003
12/2/2002
11/1/2002
10/1/2002
9/3/2002
8/1/2002
7/1/2002
6/3/2002
5/1/2002
4/1/2002
3/1/2002
2/1/2002
1/2/2002
12/3/2001
11/1/2001
10/1/2001
9/4/2001
8/1/2001
7/2/2001
6/1/2001

1050.71
995.97
1008.01
990.31
974.5
963.59
916.92
848.18
841.15
855.7
879.82
936.31
885.76
815.28
916.07
911.62
989.82
1067.14
1076.92
1147.39
1106.73
1130.2
1148.08
1139.45
1059.78
1040.94
1133.58
1211.23
1224.42
1255.82

1063.65
1053.79
1040.29
1011.01
1015.41
1015.33
965.38
924.24
895.9
864.64
935.05
954.28
941.82
907.44
924.02
965
994.46
1070.74
1106.59
1147.84
1173.94
1130.2
1176.97
1173.62
1163.38
1110.61
1155.4
1226.27
1239.78
1286.62

1031.2
995.97
990.36
960.84
962.1
963.59
902.83
847.85
788.9
806.29
840.34
869.45
872.05
768.63
800.2
833.44
775.68
952.92
1048.96
1063.46
1106.73
1074.36
1081.66
1114.53
1054.31
1026.76
944.75
1124.87
1165.54
1203.03

1058.2
1050.71
995.97
1008.01
990.31
974.5
963.59
916.92
848.18
841.15
855.7
879.82
936.31
885.76
815.28
916.07
911.62
989.82
1067.14
1076.92
1147.39
1106.73
1130.2
1148.08
1139.45
1059.78
1040.94
1133.58
1211.23
1224.38

###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###

1058.2
1050.71
995.97
1008.01
990.31
974.5
963.59
916.92
848.18
841.15
855.7
879.82
936.31
885.76
815.28
916.07
911.62
989.82
1067.14
1076.92
1147.39
1106.73
1130.2
1148.08
1139.45
1059.78
1040.94
1133.58
1211.23
1224.38

MICROSOFT AVERAGE RETURNS

Return by month avg.
-2.28%
-1.35%
2.85%
-0.10%
3.20%
2.26%
6.53%
-0.23%
3.69%
8.76%
-4.74%
6.88%
-5.39%
-8.20%
1.48%
5.88%
2.85%
-3.70%
1.78%
5.74%
-1.98%
3.57%
3.36%
7.41%
0.02%
5.31%
9.39%
8.54%
-10.99%
-8.57%
0.78%
-7.48%
-16.94%
-9.08%
1.22%
-0.99%
-8.60%
1.07%
4.75%
-0.60%
-3.48%
-6.12%
-0.86%
-4.40%

Date
Open
High
Low
Close
Volume
6/1/2011
24.99
25.1
24.37
24.43
###
5/2/2011
25.94
26.25
24.03
25.01
###
4/1/2011
25.53
26.87
24.72
25.92
###
3/1/2011
26.6
26.78
24.68
25.39
###
2/1/2011
27.8
28.34
26.43
26.58
###
1/3/2011
28.05
29.46
27.42
27.73
###
12/1/2010
25.57
28.4
25.56
27.91
###
11/1/2010
26.88
28.87
24.93
25.26
###
10/1/2010
24.77
27.2
23.78
26.67
###
9/1/2010
23.67
25.53
23.54
24.49
###
8/2/2010
25.99
26.38
23.32
23.47
###
7/1/2010
23.09
26.41
22.73
25.81
###
6/1/2010
25.53
26.93
22.95
23.01
###
5/3/2010
30.67
31.06
24.56
25.8
###
4/1/2010
29.35
31.58
28.62
30.54
###
3/1/2010
28.77
30.57
28.24
29.29
###
2/1/2010
28.39
29.03
27.57
28.67
###
1/4/2010
30.62
31.24
27.66
28.18
###
12/1/2009
29.52
31.5
29.25
30.48
###
11/2/2009
27.7
30.14
27.41
29.41
###
10/1/2009
25.41
29.35
24.43
27.73
###
9/1/2009
24.35
26.25
23.76
25.72
###
8/3/2009
23.82
25.49
23.03
24.65
###
7/1/2009
24.05
25.72
22
23.52
###
6/1/2009
21
24.34
20.86
23.77
###
5/1/2009
20.19
20.94
19.01
20.89
###
4/1/2009
18.23
21.2
18.18
20.26
###
3/2/2009
15.96
18.88
14.87
18.37
###
2/2/2009
17.03
19.93
16.1
16.15
###
1/2/2009
19.53
21
16.75
17.1
###
12/1/2008
19.88
21.25
18.47
19.44
###
11/3/2008
22.48
23.66
17.5
20.22
###
10/1/2008
26.38
27.47
20.65
22.33
###
9/2/2008
27.67
27.76
23.5
26.69
###
8/1/2008
25.92
28.5
25.07
27.29
###
7/1/2008
27.27
27.91
24.87
25.72
###
6/2/2008
28.24
29.57
27.11
27.51
###
5/1/2008
28.5
30.53
27.95
28.32
###
4/1/2008
28.83
32.1
27.93
28.52
###
3/3/2008
27.24
29.59
26.87
28.38
###
2/1/2008
31.06
33.25
27.02
27.2
###
1/2/2008
35.79
35.96
31.04
32.6
###
12/3/2007
33.5
36.72
32.63
35.6
###
11/1/2007
36.53
37.5
32.68
33.6
###

1.48%
3.58%
1.29%
-3.20%
-1.78%
3.25%
4.33%
1.00%
-2.18%
1.41%
1.26%
1.65%
3.15%
2.46%
2.13%
0.51%
0.01%
-3.09%
1.22%
1.11%
0.05%
2.55%
-0.10%
3.52%
-1.77%
0.69%
-1.12%
3.60%
-0.01%
3.00%
-2.01%
-1.91%
1.89%
-2.53%
3.25%
3.86%
1.40%
0.94%
0.23%
-3.43%
1.80%
1.21%
-1.68%
-1.64%
1.22%
1.73%
5.08%

10/1/2007
9/4/2007
8/1/2007
7/2/2007
6/1/2007
5/1/2007
4/2/2007
3/1/2007
2/1/2007
1/3/2007
12/1/2006
11/1/2006
10/2/2006
9/1/2006
8/1/2006
7/3/2006
6/1/2006
5/1/2006
4/3/2006
3/1/2006
2/1/2006
1/3/2006
12/1/2005
11/1/2005
10/3/2005
9/1/2005
8/1/2005
7/1/2005
6/1/2005
5/2/2005
4/1/2005
3/1/2005
2/1/2005
1/3/2005
12/1/2004
11/1/2004
10/1/2004
9/1/2004
8/2/2004
7/1/2004
6/1/2004
5/3/2004
4/1/2004
3/1/2004
2/2/2004
1/2/2004
12/1/2003

29.46
28.5
28.95
29.67
30.79
29.94
27.89
27.82
30.84
29.91
29.23
28.78
27.32
25.89
24.02
23.53
22.74
24.32
27.67
26.98
27.96
26.25
27.73
25.61
25.71
27.38
25.81
24.85
25.73
25.23
24.24
25.19
26.25
26.8
26.95
28.16
27.82
27.23
28.27
28.7
26.13
26.19
24.95
26.63
27.61
27.58
25.9

37
29.85
30.1
31.84
30.9
31.16
30.74
28.55
30.94
31.48
30.26
30
28.85
27.52
26.25
24.6
23.65
25
27.94
28.22
28.07
28.38
28.1
28.25
25.8
27.39
27.94
26.48
26
26.09
25.45
25.79
26.5
27.1
27.44
30.2
28.89
27.79
28.55
29.89
28.8
26.6
27.72
26.72
27.8
28.83
27.55

29.29
28.27
27.51
28.95
29.04
29.9
27.56
26.6
27.79
29.4
28.8
28.58
27.15
25.39
23.85
22.23
21.46
22.45
24
26.62
26.34
26.1
26.1
25.61
24.25
25.12
25.76
24.5
24.82
24.64
23.94
23.82
25.13
25.64
26.68
26.1
27.55
26.74
26.85
27.25
25.86
25.42
24.85
24.01
26.35
27.26
25.5

36.81
29.46
28.73
28.99
29.47
30.69
29.94
27.87
28.17
30.86
29.86
29.36
28.71
27.35
25.7
24.06
23.3
22.65
24.15
27.21
26.87
28.15
26.15
27.68
25.7
25.73
27.38
25.61
24.84
25.8
25.3
24.17
25.16
26.28
26.72
26.81
27.97
27.65
27.3
28.49
28.56
26.23
26.13
24.93
26.53
27.65
27.37

###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###

0.71%
5.50%
-1.19%
1.79%
1.62%
1.13%
5.09%
8.10%
0.84%
-1.70%
-2.74%
-6.03%
5.71%
8.64%
-11.00%
0.49%
-7.90%
-7.25%
-0.91%
-6.14%
3.67%
-2.08%
-1.56%
0.76%
7.52%
1.81%
-8.17%
-6.41%
-1.07%
not available

11/3/2003
10/1/2003
9/2/2003
8/1/2003
7/1/2003
6/2/2003
5/1/2003
4/1/2003
3/3/2003
2/3/2003
1/2/2003
12/2/2002
11/1/2002
10/1/2002
9/3/2002
8/1/2002
7/1/2002
6/3/2002
5/1/2002
4/1/2002
3/1/2002
2/1/2002
1/2/2002
12/3/2001
11/1/2001
10/1/2001
9/4/2001
8/1/2001
7/2/2001
6/1/2001

26.35
28.03
26.7
26.33
25.59
24.98
25.54
24.46
24.02
47.93
52.3
58.65
52.43
44.32
48.52
47.58
54.12
50.99
52.16
59.83
59.05
64.15
66.65
63.83
60.08
50.94
57.19
66.8
72.05
69.6

26.75
29.46
30
26.95
27.81
26.51
26.5
26.43
26.8
49.1
57.32
58.96
58.64
54.07
51.1
53.45
54.93
56.44
56.44
60.4
65
64.5
70.62
69.89
68.34
63.63
59.08
67.54
73.15
76.15

24.84
25.91
26.47
25.43
25.39
23.6
23.89
23.95
22.55
23.3
47.03
51.26
51.9
43.19
43.11
43.8
41.41
49.17
48.35
51.44
58.31
57.15
61.33
63.8
59.6
50.41
47.5
56.3
64.2
66.01

25.71
26.14
27.8
26.52
26.41
25.64
24.61
25.57
24.21
23.7
47.46
51.7
57.68
53.47
43.74
49.08
47.98
54.7
50.91
52.26
60.31
58.34
63.71
66.25
64.21
58.15
51.17
57.05
66.19
73

###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###

Adj Close
Return by month avg.
24.43
-2.32%
25.01
-2.87%
25.75
2.10%
25.22
-4.51%
26.41
-3.58%
27.39
-0.65%
27.57
10.50%
24.95
-4.70%
26.18
8.90%
24.04
4.34%
23.04
-8.57%
25.2
12.15%
22.47
-10.80%
25.19
-15.16%
29.69
4.29%
28.47
2.15%
27.87
2.24%
27.26
-7.56%
29.49
3.66%
28.45
6.51%
26.71
7.83%
24.77
4.34%
23.74
5.37%
22.53
-1.05%
22.77
13.79%
20.01
3.79%
19.28
10.30%
17.48
13.73%
15.37
-4.95%
16.17
-12.02%
18.38
-3.82%
19.11
-8.87%
20.97
-16.32%
25.06
-2.19%
25.62
6.53%
24.05
-6.53%
25.73
-2.87%
26.49
-0.34%
26.58
0.53%
26.44
4.30%
25.35
-16.23%
30.26
-8.41%
33.04
5.93%
31.19
-8.40%

34.05
27.25
26.58
26.73
27.17
28.29
27.51
25.61
25.89
28.26
27.34
26.89
26.2
24.96
23.45
21.88
21.19
20.6
21.87
24.65
24.34
25.41
23.61
24.99
23.13
23.16
24.64
22.98
22.29
23.15
22.63
21.62
22.51
23.44
23.83
23.91
22.38
22.12
21.84
22.73
22.79
20.93
20.85
19.89
21.17
22.06
21.84

24.95%
2.52%
-0.56%
-1.62%
-3.96%
2.84%
7.42%
-1.08%
-8.39%
3.37%
1.67%
2.63%
4.97%
6.44%
7.18%
3.26%
2.86%
-5.81%
-11.28%
1.27%
-4.21%
7.62%
-5.52%
8.04%
-0.13%
-6.01%
7.22%
3.10%
-3.71%
2.30%
4.67%
-3.95%
-3.97%
-1.64%
-0.33%
6.84%
1.18%
1.28%
-3.92%
-0.26%
8.89%
0.38%
4.83%
-6.05%
-4.03%
1.01%
6.48%

20.51
20.85
22.06
21.04
20.95
20.34
19.52
20.29
19.21
18.8
18.77
20.44
22.81
21.14
17.3
19.41
18.97
21.63
20.13
20.66
23.85
23.07
25.19
26.2
25.39
22.99
20.23
22.56
26.17
28.86

-1.63%
-5.49%
4.85%
0.43%
3.00%
4.20%
-3.79%
5.62%
2.18%
0.16%
-8.17%
-10.39%
7.90%
22.20%
-10.87%
2.32%
-12.30%
7.45%
-2.57%
-13.38%
3.38%
-8.42%
-3.85%
3.19%
10.44%
13.64%
-10.33%
-13.79%
-9.32%

STANDARD DEVIATION COMPARISON AND

Date
MS returnSP500 return
6/1/2011
-2.32%
-2.28%
5/2/2011
-2.87%
-1.35%
4/1/2011
2.10%
2.85%
3/1/2011
-4.51%
-0.10%
2/1/2011
-3.58%
3.20%
1/3/2011
-0.65%
2.26%
12/1/2010
10.50%
6.53%
11/1/2010
-4.70%
-0.23%
10/1/2010
8.90%
3.69%
9/1/2010
4.34%
8.76%
8/2/2010
-8.57%
-4.74%
7/1/2010
12.15%
6.88%
6/1/2010 -10.80%
-5.39%
5/3/2010 -15.16%
-8.20%
4/1/2010
4.29%
1.48%
3/1/2010
2.15%
5.88%
2/1/2010
2.24%
2.85%
1/4/2010
-7.56%
-3.70%
12/1/2009
3.66%
1.78%
11/2/2009
6.51%
5.74%
10/1/2009
7.83%
-1.98%
9/1/2009
4.34%
3.57%
8/3/2009
5.37%
3.36%
7/1/2009
-1.05%
7.41%
6/1/2009
13.79%
0.02%
5/1/2009
3.79%
5.31%
4/1/2009
10.30%
9.39%
3/2/2009
13.73%
8.54%
2/2/2009
-4.95%
-10.99%
1/2/2009 -12.02%
-8.57%
12/1/2008
-3.82%
0.78%
11/3/2008
-8.87%
-7.48%
10/1/2008 -16.32%
-16.94%
9/2/2008
-2.19%
-9.08%
8/1/2008
6.53%
1.22%
7/1/2008
-6.53%
-0.99%
6/2/2008
-2.87%
-8.60%
5/1/2008
-0.34%
1.07%
4/1/2008
0.53%
4.75%
3/3/2008
4.30%
-0.60%
2/1/2008 -16.23%
-3.48%
1/2/2008
-8.41%
-6.12%
12/3/2007
5.93%
-0.86%
11/1/2007
-8.40%
-4.40%

Avg MS return
0.13%
AVG SP500 return 0.17%
St. Deviation MS 7.42%
St. Deviation SP5004.57%
Interpretation:

Higher standard deviation implies higher standalon

risk of stock or portfolio. Comparing the standard
deviation of Microsoft and SP500, it is clear that tha
SP500 has a more favorable relationship between
risk and return, with lover risk than Microsoft (0.045
deviation vs 0.074) and better returns (0.17 vs
0.13). However, this is to be expected as SP500 is a
portfolio of stocks and portfolios usually have lower
risk comparing to individual stock.

10/1/2007
9/4/2007
8/1/2007
7/2/2007
6/1/2007
5/1/2007
4/2/2007
3/1/2007
2/1/2007
1/3/2007
12/1/2006
11/1/2006
10/2/2006
9/1/2006
8/1/2006
7/3/2006
6/1/2006
5/1/2006
4/3/2006
3/1/2006
2/1/2006
1/3/2006
12/1/2005
11/1/2005
10/3/2005
9/1/2005
8/1/2005
7/1/2005
6/1/2005
5/2/2005
4/1/2005
3/1/2005
2/1/2005
1/3/2005
12/1/2004
11/1/2004
10/1/2004
9/1/2004
8/2/2004
7/1/2004
6/1/2004
5/3/2004
4/1/2004
3/1/2004
2/2/2004
1/2/2004
12/1/2003

24.95%
2.52%
-0.56%
-1.62%
-3.96%
2.84%
7.42%
-1.08%
-8.39%
3.37%
1.67%
2.63%
4.97%
6.44%
7.18%
3.26%
2.86%
-5.81%
-11.28%
1.27%
-4.21%
7.62%
-5.52%
8.04%
-0.13%
-6.01%
7.22%
3.10%
-3.71%
2.30%
4.67%
-3.95%
-3.97%
-1.64%
-0.33%
6.84%
1.18%
1.28%
-3.92%
-0.26%
8.89%
0.38%
4.83%
-6.05%
-4.03%
1.01%
6.48%

1.48%
3.58%
1.29%
-3.20%
-1.78%
3.25%
4.33%
1.00%
-2.18%
1.41%
1.26%
1.65%
3.15%
2.46%
2.13%
0.51%
0.01%
-3.09%
1.22%
1.11%
0.05%
2.55%
-0.10%
3.52%
-1.77%
0.69%
-1.12%
3.60%
-0.01%
3.00%
-2.01%
-1.91%
1.89%
-2.53%
3.25%
3.86%
1.40%
0.94%
0.23%
-3.43%
1.80%
1.21%
-1.68%
-1.64%
1.22%
1.73%
5.08%

11/3/2003
-1.63%
0.71%
10/1/2003
-5.49%
5.50%
9/2/2003
4.85%
-1.19%
8/1/2003
0.43%
1.79%
7/1/2003
3.00%
1.62%
6/2/2003
4.20%
1.13%
5/1/2003
-3.79%
5.09%
4/1/2003
5.62%
8.10%
3/3/2003
2.18%
0.84%
2/3/2003
0.16%
-1.70%
1/2/2003
-8.17%
-2.74%
12/2/2002 -10.39%
-6.03%
11/1/2002
7.90%
5.71%
10/1/2002
22.20%
8.64%
9/3/2002 -10.87%
-11.00%
8/1/2002
2.32%
0.49%
7/1/2002 -12.30%
-7.90%
6/3/2002
7.45%
-7.25%
5/1/2002
-2.57%
-0.91%
4/1/2002 -13.38%
-6.14%
3/1/2002
3.38%
3.67%
2/1/2002
-8.42%
-2.08%
1/2/2002
-3.85%
-1.56%
12/3/2001
3.19%
0.76%
11/1/2001
10.44%
7.52%
10/1/2001
13.64%
1.81%
9/4/2001 -10.33%
-8.17%
8/1/2001 -13.79%
-6.41%
7/2/2001
-9.32%
-1.07%
6/1/2001 n/a
not available
0.17%

PARISON AND AVG RETURNS

mplies higher standalone

mparing the standard
SP500, it is clear that that
e relationship between
isk than Microsoft (0.045
ter returns (0.17 vs
e expected as SP500 is a
olios usually have lower
stock.

PORTFOLIO RETURNS, WEIGHTS, STANDARD DEVIATION

portfolio
1
SP weight
100%
MS weight
0%
Month MS return SP500 return
6/1/2011
-2.32%
-2.28%
-2.28%
5/2/2011
-2.87%
-1.35%
-1.35%
4/1/2011
2.10%
2.85%
2.85%
3/1/2011
-4.51%
-0.10%
-0.10%
2/1/2011
-3.58%
3.20%
3.20%
1/3/2011
-0.65%
2.26%
2.26%
12/1/2010
10.50%
6.53%
6.53%
11/1/2010
-4.70%
-0.23%
-0.23%
10/1/2010
8.90%
3.69%
3.69%
9/1/2010
4.34%
8.76%
8.76%
8/2/2010
-8.57%
-4.74%
-4.74%
7/1/2010
12.15%
6.88%
6.88%
6/1/2010
-10.80%
-5.39%
-5.39%
5/3/2010
-15.16%
-8.20%
-8.20%
4/1/2010
4.29%
1.48%
1.48%
3/1/2010
2.15%
5.88%
5.88%
2/1/2010
2.24%
2.85%
2.85%
1/4/2010
-7.56%
-3.70%
-3.70%
12/1/2009
3.66%
1.78%
1.78%
11/2/2009
6.51%
5.74%
5.74%
10/1/2009
7.83%
-1.98%
-1.98%
9/1/2009
4.34%
3.57%
3.57%
8/3/2009
5.37%
3.36%
3.36%
7/1/2009
-1.05%
7.41%
7.41%
6/1/2009
13.79%
0.02%
0.02%
5/1/2009
3.79%
5.31%
5.31%
4/1/2009
10.30%
9.39%
9.39%
3/2/2009
13.73%
8.54%
8.54%
2/2/2009
-4.95%
-10.99%
-10.99%
1/2/2009
-12.02%
-8.57%
-8.57%
12/1/2008
-3.82%
0.78%
0.78%
11/3/2008
-8.87%
-7.48%
-7.48%
10/1/2008
-16.32%
-16.94%
-16.94%
9/2/2008
-2.19%
-9.08%
-9.08%
8/1/2008
6.53%
1.22%
1.22%
7/1/2008
-6.53%
-0.99%
-0.99%
6/2/2008
-2.87%
-8.60%
-8.60%
5/1/2008
-0.34%
1.07%
1.07%
4/1/2008
0.53%
4.75%
4.75%
3/3/2008
4.30%
-0.60%
-0.60%
2/1/2008
-16.23%
-3.48%
-3.48%

2
95%
5%
-2.28%
-1.43%
2.81%
-0.32%
2.86%
2.12%
6.73%
-0.45%
3.95%
8.53%
-4.94%
7.14%
-5.66%
-8.55%
1.62%
5.69%
2.82%
-3.89%
1.87%
5.78%
-1.49%
3.61%
3.46%
6.99%
0.71%
5.23%
9.44%
8.80%
-10.69%
-8.74%
0.55%
-7.55%
-16.91%
-8.73%
1.48%
-1.26%
-8.31%
1.00%
4.54%
-0.35%
-4.11%

3
90%
10%

4
85%
15%

5
80%
20%

-2.28%
-2.28%
-2.29%
-1.50%
-1.58%
-1.65%
2.77%
2.74%
2.70%
-0.54%
-0.76%
-0.98%
2.52%
2.18%
1.84%
1.97%
1.83%
1.68%
6.93%
7.13%
7.32%
-0.68%
-0.90%
-1.12%
4.21%
4.47%
4.73%
8.31%
8.09%
7.87%
-5.13%
-5.32%
-5.51%
7.40%
7.67%
7.93%
-5.93%
-6.20%
-6.47%
-8.89%
-9.24%
-9.59%
1.76%
1.90%
2.04%
5.51%
5.32%
5.13%
2.79%
2.76%
2.73%
-4.08%
-4.28%
-4.47%
1.96%
2.06%
2.15%
5.81%
5.85%
5.89%
-1.00%
-0.50%
-0.01%
3.65%
3.69%
3.73%
3.56%
3.66%
3.76%
6.57%
6.14%
5.72%
1.40%
2.09%
2.77%
5.16%
5.08%
5.00%
9.48%
9.53%
9.57%
9.06%
9.32%
9.58%
-10.39% -10.09%
-9.78%
-8.91%
-9.08%
-9.26%
0.32%
0.09%
-0.14%
-7.62%
-7.69%
-7.76%
-16.88% -16.85% -16.82%
-8.39%
-8.05%
-7.70%
1.75%
2.02%
2.28%
-1.54%
-1.82%
-2.09%
-8.02%
-7.74%
-7.45%
0.93%
0.86%
0.79%
4.33%
4.12%
3.91%
-0.11%
0.14%
0.38%
-4.75%
-5.39%
-6.03%

1/2/2008
12/3/2007
11/1/2007
10/1/2007
9/4/2007
8/1/2007
7/2/2007
6/1/2007
5/1/2007
4/2/2007
3/1/2007
2/1/2007
1/3/2007
12/1/2006
11/1/2006
10/2/2006
9/1/2006
8/1/2006
7/3/2006
6/1/2006
5/1/2006
4/3/2006
3/1/2006
2/1/2006
1/3/2006
12/1/2005
11/1/2005
10/3/2005
9/1/2005
8/1/2005
7/1/2005
6/1/2005
5/2/2005
4/1/2005
3/1/2005
2/1/2005
1/3/2005
12/1/2004
11/1/2004
10/1/2004
9/1/2004
8/2/2004
7/1/2004
6/1/2004
5/3/2004
4/1/2004
3/1/2004

-8.41%
5.93%
-8.40%
24.95%
2.52%
-0.56%
-1.62%
-3.96%
2.84%
7.42%
-1.08%
-8.39%
3.37%
1.67%
2.63%
4.97%
6.44%
7.18%
3.26%
2.86%
-5.81%
-11.28%
1.27%
-4.21%
7.62%
-5.52%
8.04%
-0.13%
-6.01%
7.22%
3.10%
-3.71%
2.30%
4.67%
-3.95%
-3.97%
-1.64%
-0.33%
6.84%
1.18%
1.28%
-3.92%
-0.26%
8.89%
0.38%
4.83%
-6.05%

-6.12%
-0.86%
-4.40%
1.48%
3.58%
1.29%
-3.20%
-1.78%
3.25%
4.33%
1.00%
-2.18%
1.41%
1.26%
1.65%
3.15%
2.46%
2.13%
0.51%
0.01%
-3.09%
1.22%
1.11%
0.05%
2.55%
-0.10%
3.52%
-1.77%
0.69%
-1.12%
3.60%
-0.01%
3.00%
-2.01%
-1.91%
1.89%
-2.53%
3.25%
3.86%
1.40%
0.94%
0.23%
-3.43%
1.80%
1.21%
-1.68%
-1.64%

-6.12%
-0.86%
-4.40%
1.48%
3.58%
1.29%
-3.20%
-1.78%
3.25%
4.33%
1.00%
-2.18%
1.41%
1.26%
1.65%
3.15%
2.46%
2.13%
0.51%
0.01%
-3.09%
1.22%
1.11%
0.05%
2.55%
-0.10%
3.52%
-1.77%
0.69%
-1.12%
3.60%
-0.01%
3.00%
-2.01%
-1.91%
1.89%
-2.53%
3.25%
3.86%
1.40%
0.94%
0.23%
-3.43%
1.80%
1.21%
-1.68%
-1.64%

-6.23%
-0.52%
-4.60%
2.66%
3.53%
1.19%
-3.12%
-1.89%
3.23%
4.48%
0.89%
-2.49%
1.50%
1.28%
1.70%
3.24%
2.66%
2.38%
0.65%
0.15%
-3.23%
0.59%
1.12%
-0.17%
2.80%
-0.37%
3.74%
-1.69%
0.36%
-0.70%
3.57%
-0.20%
2.96%
-1.68%
-2.01%
1.60%
-2.48%
3.07%
4.01%
1.39%
0.95%
0.02%
-3.27%
2.15%
1.17%
-1.35%
-1.86%

-6.35%
-0.18%
-4.80%
3.83%
3.47%
1.10%
-3.04%
-2.00%
3.21%
4.64%
0.79%
-2.80%
1.60%
1.30%
1.75%
3.33%
2.85%
2.63%
0.78%
0.29%
-3.36%
-0.03%
1.13%
-0.38%
3.05%
-0.64%
3.97%
-1.61%
0.02%
-0.29%
3.55%
-0.38%
2.93%
-1.34%
-2.12%
1.30%
-2.44%
2.89%
4.16%
1.38%
0.97%
-0.19%
-3.11%
2.51%
1.13%
-1.03%
-2.08%

-6.46%
0.16%
-5.00%
5.00%
3.42%
1.01%
-2.96%
-2.11%
3.19%
4.79%
0.69%
-3.11%
1.70%
1.32%
1.79%
3.42%
3.05%
2.88%
0.92%
0.44%
-3.50%
-0.66%
1.13%
-0.59%
3.31%
-0.91%
4.20%
-1.53%
-0.31%
0.13%
3.52%
-0.57%
2.89%
-1.01%
-2.22%
1.01%
-2.40%
2.71%
4.31%
1.37%
0.99%
-0.39%
-2.95%
2.86%
1.08%
-0.70%
-2.30%

-6.58%
0.50%
-5.20%
6.18%
3.37%
0.92%
-2.88%
-2.22%
3.17%
4.95%
0.58%
-3.42%
1.80%
1.34%
1.84%
3.51%
3.25%
3.14%
1.06%
0.58%
-3.63%
-1.28%
1.14%
-0.81%
3.56%
-1.18%
4.42%
-1.45%
-0.65%
0.55%
3.50%
-0.75%
2.86%
-0.67%
-2.32%
0.72%
-2.35%
2.53%
4.45%
1.36%
1.01%
-0.60%
-2.80%
3.22%
1.04%
-0.38%
-2.52%

2/2/2004
1/2/2004
12/1/2003
11/3/2003
10/1/2003
9/2/2003
8/1/2003
7/1/2003
6/2/2003
5/1/2003
4/1/2003
3/3/2003
2/3/2003
1/2/2003
12/2/2002
11/1/2002
10/1/2002
9/3/2002
8/1/2002
7/1/2002
6/3/2002
5/1/2002
4/1/2002
3/1/2002
2/1/2002
1/2/2002
12/3/2001
11/1/2001
10/1/2001
9/4/2001
8/1/2001
7/2/2001

-4.03%
1.01%
6.48%
-1.63%
-5.49%
4.85%
0.43%
3.00%
4.20%
-3.79%
5.62%
2.18%
0.16%
-8.17%
-10.39%
7.90%
22.20%
-10.87%
2.32%
-12.30%
7.45%
-2.57%
-13.38%
3.38%
-8.42%
-3.85%
3.19%
10.44%
13.64%
-10.33%
-13.79%
-9.32%

1.22%
1.73%
5.08%
0.71%
5.50%
-1.19%
1.79%
1.62%
1.13%
5.09%
8.10%
0.84%
-1.70%
-2.74%
-6.03%
5.71%
8.64%
-11.00%
0.49%
-7.90%
-7.25%
-0.91%
-6.14%
3.67%
-2.08%
-1.56%
0.76%
7.52%
1.81%
-8.17%
-6.41%
-1.07%

1.22%
1.73%
5.08%
0.71%
5.50%
-1.19%
1.79%
1.62%
1.13%
5.09%
8.10%
0.84%
-1.70%
-2.74%
-6.03%
5.71%
8.64%
-11.00%
0.49%
-7.90%
-7.25%
-0.91%
-6.14%
3.67%
-2.08%
-1.56%
0.76%
7.52%
1.81%
-8.17%
-6.41%
-1.07%

0.96%
1.69%
5.15%
0.60%
4.95%
-0.89%
1.72%
1.69%
1.29%
4.65%
7.98%
0.90%
-1.61%
-3.01%
-6.25%
5.82%
9.32%
-11.00%
0.58%
-8.12%
-6.51%
-0.99%
-6.50%
3.66%
-2.39%
-1.67%
0.88%
7.66%
2.40%
-8.28%
-6.78%
-1.49%

STDEV:

7.42%

0.70%
0.43%
0.17%
1.66%
1.62%
1.58%
5.22%
5.29%
5.36%
0.48%
0.36%
0.24%
4.40%
3.85%
3.30%
-0.59%
-0.29%
0.01%
1.65%
1.58%
1.52%
1.76%
1.83%
1.90%
1.44%
1.59%
1.75%
4.20%
3.76%
3.31%
7.86%
7.73%
7.61%
0.97%
1.04%
1.10%
-1.51%
-1.42%
-1.33%
-3.28%
-3.56%
-3.83%
-6.47%
-6.69%
-6.90%
5.93%
6.04%
6.15%
10.00% 10.68% 11.36%
-10.99% -10.98% -10.98%
0.67%
0.76%
0.85%
-8.34%
-8.56%
-8.78%
-5.78%
-5.04%
-4.31%
-1.07%
-1.16%
-1.24%
-6.87%
-7.23%
-7.59%
3.64%
3.63%
3.62%
-2.71%
-3.03%
-3.34%
-1.79%
-1.90%
-2.02%
1.00%
1.12%
1.24%
7.81%
7.96%
8.10%
2.99%
3.58%
4.18%
-8.39%
-8.50%
-8.60%
-7.15%
-7.52%
-7.89%
-1.90%
-2.31%
-2.72%

4.57%
ms
sp500
50.00%
50.00%
SP weight
MS weight

100%
0%

95%
5%

90%
10%

85%
15%

80%
20%

Return on Portfolio
STANDARD D[p] regular formula

0.165%
0.05

0.164%
0.05

0.162%
0.05

0.160%
0.05

0.159%
0.05

return
STANDARD D[p] AYCA Formula

0.165%
4.570%

0.164%
4.168%

0.162%
3.797%

0.160%
3.465%

0.159%
3.185%

Portfolio weight that yields smallest standard

deviation is65% SP500
35% MICROSOFT
= 2.802%

Portfolio weight that yields smallest standard

deviation is65% SP500
35% MICROSOFT
= 2.802%
What that tells about the diversification is that there
is a mathematical point when adding an extra stock
to the portfolio that the risk of the portfolio can reach
its minimum even if the stock added has a much
higher risk comparing to the portfolio.
Diversification lowers portfolio risk.

R
0.180%

0.170%

0.160%

0.150%

0.140%

0.130%

0.120%
2.000%

RD DEVIATION, GRAPH
6
75%
25%

7
70%
30%

8
65%
35%

9
60%
40%

10
55%
45%

11
50%
50%

12
45%
55%

13
40%
60%

14
35%
65%

-2.29%
-2.29%
-2.29%
-2.29%
-2.30%
-2.30%
-2.30%
-1.73%
-1.81%
-1.88%
-1.96%
-2.04%
-2.11%
-2.19%
2.66%
2.63%
2.59%
2.55%
2.51%
2.48%
2.44%
-1.21%
-1.43%
-1.65%
-1.87%
-2.09%
-2.31%
-2.53%
1.50%
1.16%
0.82%
0.49%
0.15%
-0.19%
-0.53%
1.54%
1.39%
1.24%
1.10%
0.95%
0.81%
0.66%
7.52%
7.72%
7.92%
8.12%
8.32%
8.52%
8.71%
-1.35%
-1.57%
-1.79%
-2.02%
-2.24%
-2.46%
-2.69%
4.99%
5.25%
5.51%
5.77%
6.03%
6.29%
6.55%
7.65%
7.43%
7.21%
6.99%
6.77%
6.55%
6.33%
-5.70%
-5.89%
-6.08%
-6.28%
-6.47%
-6.66%
-6.85%
8.20%
8.46%
8.72%
8.99%
9.25%
9.51%
9.78%
-6.74%
-7.01%
-7.28%
-7.55%
-7.82%
-8.09%
-8.36%
-9.94% -10.29% -10.63% -10.98% -11.33% -11.68% -12.03%
2.18%
2.32%
2.46%
2.60%
2.74%
2.88%
3.02%
4.95%
4.76%
4.58%
4.39%
4.20%
4.02%
3.83%
2.70%
2.67%
2.64%
2.61%
2.58%
2.54%
2.51%
-4.66%
-4.86%
-5.05%
-5.24%
-5.44%
-5.63%
-5.82%
2.25%
2.34%
2.43%
2.53%
2.62%
2.72%
2.81%
5.93%
5.97%
6.01%
6.05%
6.09%
6.13%
6.16%
0.48%
0.97%
1.46%
1.95%
2.44%
2.93%
3.42%
3.76%
3.80%
3.84%
3.88%
3.92%
3.96%
3.99%
3.86%
3.96%
4.06%
4.16%
4.26%
4.36%
4.46%
5.30%
4.87%
4.45%
4.03%
3.60%
3.18%
2.76%
3.46%
4.15%
4.84%
5.53%
6.22%
6.91%
7.60%
4.93%
4.85%
4.78%
4.70%
4.62%
4.55%
4.47%
9.62%
9.66%
9.71%
9.75%
9.80%
9.84%
9.89%
9.84% 10.10% 10.36% 10.62% 10.87% 11.13% 11.39%
-9.48%
-9.18%
-8.88%
-8.57%
-8.27%
-7.97%
-7.67%
-9.43%
-9.60%
-9.78%
-9.95% -10.12% -10.29% -10.47%
-0.37%
-0.60%
-0.83%
-1.06%
-1.29%
-1.52%
-1.75%
-7.83%
-7.90%
-7.97%
-8.04%
-8.11%
-8.18%
-8.25%
-16.79% -16.76% -16.72% -16.69% -16.66% -16.63% -16.60%
-7.36%
-7.01%
-6.67%
-6.32%
-5.98%
-5.63%
-5.29%
2.55%
2.81%
3.08%
3.34%
3.61%
3.87%
4.14%
-2.37%
-2.65%
-2.93%
-3.20%
-3.48%
-3.76%
-4.03%
-7.16%
-6.88%
-6.59%
-6.31%
-6.02%
-5.73%
-5.45%
0.72%
0.65%
0.58%
0.51%
0.43%
0.36%
0.29%
3.70%
3.49%
3.28%
3.06%
2.85%
2.64%
2.43%
0.63%
0.87%
1.12%
1.36%
1.61%
1.85%
2.10%
-6.66%
-7.30%
-7.94%
-8.58%
-9.21%
-9.85% -10.49%

-2.30%
-2.26%
2.40%
-2.75%
-0.87%
0.51%
8.91%
-2.91%
6.82%
6.11%
-7.04%
10.04%
-8.63%
-12.37%
3.16%
3.64%
2.48%
-6.02%
2.90%
6.20%
3.91%
4.03%
4.56%
2.33%
8.28%
4.40%
9.94%
11.65%
-7.37%
-10.64%
-1.98%
-8.32%
-16.57%
-4.94%
4.40%
-4.31%
-5.16%
0.22%
2.22%
2.34%
-11.13%

-2.30%
-2.34%
2.36%
-2.97%
-1.21%
0.37%
9.11%
-3.13%
7.08%
5.89%
-7.23%
10.30%
-8.90%
-12.72%
3.30%
3.46%
2.45%
-6.21%
3.00%
6.24%
4.40%
4.07%
4.67%
1.91%
8.97%
4.32%
9.98%
11.91%
-7.06%
-10.81%
-2.21%
-8.39%
-16.54%
-4.60%
4.67%
-4.59%
-4.87%
0.15%
2.01%
2.59%
-11.76%

-6.69%
0.84%
-5.40%
7.35%
3.31%
0.82%
-2.80%
-2.33%
3.15%
5.10%
0.48%
-3.74%
1.90%
1.36%
1.89%
3.61%
3.45%
3.39%
1.20%
0.72%
-3.77%
-1.91%
1.15%
-1.02%
3.82%
-1.45%
4.65%
-1.36%
-0.98%
0.96%
3.47%
-0.94%
2.82%
-0.34%
-2.42%
0.43%
-2.31%
2.35%
4.60%
1.34%
1.02%
-0.81%
-2.64%
3.57%
1.00%
-0.05%
-2.74%

-6.81%
1.18%
-5.60%
8.52%
3.26%
0.73%
-2.72%
-2.43%
3.13%
5.26%
0.37%
-4.05%
1.99%
1.39%
1.94%
3.70%
3.65%
3.64%
1.33%
0.87%
-3.91%
-2.53%
1.16%
-1.23%
4.07%
-1.72%
4.88%
-1.28%
-1.32%
1.38%
3.45%
-1.12%
2.79%
-0.01%
-2.52%
0.13%
-2.26%
2.17%
4.75%
1.33%
1.04%
-1.01%
-2.48%
3.93%
0.96%
0.27%
-2.96%

-6.92%
1.52%
-5.80%
9.70%
3.21%
0.64%
-2.65%
-2.54%
3.11%
5.41%
0.27%
-4.36%
2.09%
1.41%
1.99%
3.79%
3.85%
3.89%
1.47%
1.01%
-4.04%
-3.16%
1.17%
-1.44%
4.32%
-1.99%
5.10%
-1.20%
-1.65%
1.80%
3.42%
-1.31%
2.75%
0.33%
-2.63%
-0.16%
-2.22%
1.99%
4.90%
1.32%
1.06%
-1.22%
-2.32%
4.28%
0.92%
0.60%
-3.18%

-7.04%
1.85%
-6.00%
10.87%
3.16%
0.55%
-2.57%
-2.65%
3.09%
5.57%
0.17%
-4.67%
2.19%
1.43%
2.04%
3.88%
4.05%
4.15%
1.61%
1.15%
-4.18%
-3.78%
1.18%
-1.66%
4.58%
-2.27%
5.33%
-1.12%
-1.99%
2.22%
3.40%
-1.49%
2.72%
0.66%
-2.73%
-0.45%
-2.17%
1.81%
5.05%
1.31%
1.07%
-1.43%
-2.16%
4.63%
0.88%
0.92%
-3.40%

-7.15%
2.19%
-6.20%
12.04%
3.10%
0.45%
-2.49%
-2.76%
3.07%
5.72%
0.06%
-4.98%
2.29%
1.45%
2.09%
3.97%
4.25%
4.40%
1.75%
1.29%
-4.31%
-4.41%
1.18%
-1.87%
4.83%
-2.54%
5.55%
-1.03%
-2.32%
2.63%
3.37%
-1.68%
2.68%
1.00%
-2.83%
-0.75%
-2.13%
1.63%
5.20%
1.30%
1.09%
-1.64%
-2.00%
4.99%
0.84%
1.25%
-3.62%

-7.27%
2.53%
-6.40%
13.22%
3.05%
0.36%
-2.41%
-2.87%
3.05%
5.87%
-0.04%
-5.29%
2.39%
1.47%
2.14%
4.06%
4.45%
4.65%
1.88%
1.44%
-4.45%
-5.03%
1.19%
-2.08%
5.09%
-2.81%
5.78%
-0.95%
-2.66%
3.05%
3.35%
-1.86%
2.65%
1.33%
-2.93%
-1.04%
-2.08%
1.46%
5.35%
1.29%
1.11%
-1.84%
-1.85%
5.34%
0.80%
1.57%
-3.84%

-7.38%
2.87%
-6.60%
14.39%
3.00%
0.27%
-2.33%
-2.98%
3.02%
6.03%
-0.15%
-5.60%
2.48%
1.49%
2.19%
4.15%
4.65%
4.90%
2.02%
1.58%
-4.59%
-5.66%
1.20%
-2.30%
5.34%
-3.08%
6.01%
-0.87%
-2.99%
3.47%
3.32%
-2.05%
2.61%
1.66%
-3.03%
-1.33%
-2.04%
1.28%
5.50%
1.28%
1.13%
-2.05%
-1.69%
5.70%
0.75%
1.90%
-4.06%

-7.49%
3.21%
-6.80%
15.57%
2.94%
0.18%
-2.25%
-3.09%
3.00%
6.18%
-0.25%
-5.91%
2.58%
1.51%
2.24%
4.24%
4.85%
5.16%
2.16%
1.72%
-4.72%
-6.28%
1.21%
-2.51%
5.59%
-3.35%
6.23%
-0.79%
-3.33%
3.89%
3.30%
-2.23%
2.58%
2.00%
-3.14%
-1.62%
-1.99%
1.10%
5.65%
1.27%
1.14%
-2.26%
-1.53%
6.05%
0.71%
2.22%
-4.28%

-7.61%
3.55%
-7.00%
16.74%
2.89%
0.09%
-2.17%
-3.20%
2.98%
6.34%
-0.35%
-6.22%
2.68%
1.53%
2.29%
4.33%
5.05%
5.41%
2.29%
1.86%
-4.86%
-6.91%
1.22%
-2.72%
5.85%
-3.62%
6.46%
-0.71%
-3.66%
4.30%
3.27%
-2.42%
2.54%
2.33%
-3.24%
-1.92%
-1.95%
0.92%
5.79%
1.25%
1.16%
-2.47%
-1.37%
6.41%
0.67%
2.55%
-4.50%

-0.09%
-0.36%
-0.62%
-0.88%
-1.14%
-1.41%
-1.67%
-1.93%
1.55%
1.51%
1.48%
1.44%
1.40%
1.37%
1.33%
1.30%
5.43%
5.50%
5.57%
5.64%
5.71%
5.78%
5.85%
5.92%
0.13%
0.01%
-0.11%
-0.22%
-0.34%
-0.46%
-0.58%
-0.69%
2.75%
2.20%
1.65%
1.10%
0.55%
0.01%
-0.54%
-1.09%
0.32%
0.62%
0.92%
1.22%
1.52%
1.83%
2.13%
2.43%
1.45%
1.38%
1.31%
1.24%
1.18%
1.11%
1.04%
0.97%
1.97%
2.04%
2.10%
2.17%
2.24%
2.31%
2.38%
2.45%
1.90%
2.05%
2.21%
2.36%
2.51%
2.67%
2.82%
2.97%
2.87%
2.42%
1.98%
1.54%
1.09%
0.65%
0.20%
-0.24%
7.48%
7.36%
7.24%
7.11%
6.99%
6.86%
6.74%
6.62%
1.17%
1.24%
1.31%
1.37%
1.44%
1.51%
1.58%
1.64%
-1.24%
-1.14%
-1.05%
-0.96%
-0.86%
-0.77%
-0.68%
-0.58%
-4.10%
-4.37%
-4.64%
-4.91%
-5.18%
-5.46%
-5.73%
-6.00%
-7.12%
-7.34%
-7.56%
-7.78%
-7.99%
-8.21%
-8.43%
-8.65%
6.26%
6.36%
6.47%
6.58%
6.69%
6.80%
6.91%
7.02%
12.03% 12.71% 13.39% 14.07% 14.74% 15.42% 16.10% 16.78%
-10.97% -10.96% -10.96% -10.95% -10.94% -10.94% -10.93% -10.92%
0.95%
1.04%
1.13%
1.22%
1.31%
1.40%
1.50%
1.59%
-9.00%
-9.22%
-9.44%
-9.66%
-9.88% -10.10% -10.32% -10.54%
-3.57%
-2.84%
-2.10%
-1.37%
-0.63%
0.10%
0.84%
1.57%
-1.32%
-1.41%
-1.49%
-1.57%
-1.65%
-1.74%
-1.82%
-1.90%
-7.95%
-8.31%
-8.67%
-9.04%
-9.40%
-9.76% -10.12% -10.48%
3.60%
3.59%
3.57%
3.56%
3.54%
3.53%
3.51%
3.50%
-3.66%
-3.98%
-4.30%
-4.61%
-4.93%
-5.25%
-5.56%
-5.88%
-2.13%
-2.25%
-2.36%
-2.48%
-2.59%
-2.71%
-2.82%
-2.94%
1.37%
1.49%
1.61%
1.73%
1.85%
1.97%
2.10%
2.22%
8.25%
8.39%
8.54%
8.69%
8.83%
8.98%
9.12%
9.27%
4.77%
5.36%
5.95%
6.54%
7.13%
7.73%
8.32%
8.91%
-8.71%
-8.82%
-8.93%
-9.03%
-9.14%
-9.25%
-9.36%
-9.47%
-8.26%
-8.63%
-9.00%
-9.36%
-9.73% -10.10% -10.47% -10.84%
-3.14%
-3.55%
-3.96%
-4.37%
-4.79%
-5.20%
-5.61%
-6.02%

-2.20%
1.26%
5.99%
-0.81%
-1.64%
2.73%
0.90%
2.52%
3.13%
-0.69%
6.49%
1.71%
-0.49%
-6.27%
-8.87%
7.13%
17.45%
-10.92%
1.68%
-10.76%
2.31%
-1.99%
-10.84%
3.48%
-6.20%
-3.05%
2.34%
9.42%
9.50%
-9.57%
-11.21%
-6.43%

75%
25%

70%
30%

65%
35%

60%
40%

55%
45%

50%
50%

45%
55%

40%
60%

35%
65%

0.157%
0.05

0.156%
0.05

0.154%
0.05

0.152%
0.05

0.151%
0.05

0.149%
0.06

0.148%
0.06

0.146%
0.06

0.145%
0.06

0.157%
2.972%

0.156% 0.154%
2.840% 2.802%

0.152%
2.862%

0.151%
3.012%

0.149%
3.242%

0.148%
3.534%

0.146%
3.876%

0.145%
4.255%

Return over standard deviation

Return over standard deviation

0.180%

0.170%

0.160%

0.150%

0.140%

0.130%

0.120%
2.000%

3.000%

4.000%

5.000%

6.000%

7.000%

15
30%
70%

16
25%
75%

17
20%
80%

18
15%
85%

19
10%
90%

20
5%
95%

21
0%
100%

-2.31%
-2.42%
2.33%
-3.19%
-1.55%
0.22%
9.31%
-3.36%
7.34%
5.66%
-7.42%
10.57%
-9.18%
-13.07%
3.44%
3.27%
2.42%
-6.40%
3.09%
6.28%
4.89%
4.11%
4.77%
1.49%
9.66%
4.24%
10.03%
12.17%
-6.76%
-10.99%
-2.44%
-8.45%
-16.51%
-4.25%
4.94%
-4.87%
-4.59%
0.08%
1.80%
2.83%
-12.40%

-2.31%
-2.49%
2.29%
-3.41%
-1.88%
0.08%
9.51%
-3.58%
7.60%
5.44%
-7.61%
10.83%
-9.45%
-13.42%
3.58%
3.08%
2.39%
-6.60%
3.19%
6.32%
5.38%
4.15%
4.87%
1.06%
10.35%
4.17%
10.07%
12.43%
-6.46%
-11.16%
-2.67%
-8.52%
-16.48%
-3.91%
5.20%
-5.14%
-4.30%
0.01%
1.59%
3.08%
-13.04%

-2.31%
-2.57%
2.25%
-3.63%
-2.22%
-0.07%
9.71%
-3.80%
7.86%
5.22%
-7.81%
11.10%
-9.72%
-13.76%
3.72%
2.90%
2.36%
-6.79%
3.28%
6.36%
5.87%
4.19%
4.97%
0.64%
11.04%
4.09%
10.12%
12.69%
-6.16%
-11.33%
-2.90%
-8.59%
-16.45%
-3.56%
5.47%
-5.42%
-4.01%
-0.06%
1.37%
3.32%
-13.68%

-2.31%
-2.65%
2.21%
-3.85%
-2.56%
-0.22%
9.91%
-4.03%
8.12%
5.00%
-8.00%
11.36%
-9.99%
-14.11%
3.86%
2.71%
2.33%
-6.98%
3.37%
6.40%
6.36%
4.22%
5.07%
0.22%
11.73%
4.01%
10.16%
12.95%
-5.85%
-11.51%
-3.13%
-8.66%
-16.41%
-3.22%
5.73%
-5.70%
-3.73%
-0.13%
1.16%
3.57%
-14.31%

-2.32%
-2.72%
2.18%
-4.07%
-2.90%
-0.36%
10.10%
-4.25%
8.38%
4.78%
-8.19%
11.62%
-10.26%
-14.46%
4.00%
2.53%
2.30%
-7.18%
3.47%
6.44%
6.85%
4.26%
5.17%
-0.21%
12.42%
3.94%
10.21%
13.21%
-5.55%
-11.68%
-3.36%
-8.73%
-16.38%
-2.88%
6.00%
-5.98%
-3.44%
-0.20%
0.95%
3.81%
-14.95%

-2.32%
-2.80%
2.14%
-4.29%
-3.24%
-0.51%
10.30%
-4.47%
8.64%
4.56%
-8.38%
11.89%
-10.53%
-14.81%
4.14%
2.34%
2.27%
-7.37%
3.56%
6.48%
7.34%
4.30%
5.27%
-0.63%
13.10%
3.86%
10.25%
13.47%
-5.25%
-11.85%
-3.59%
-8.80%
-16.35%
-2.53%
6.26%
-6.25%
-3.16%
-0.27%
0.74%
4.06%
-15.59%

-2.32%
-2.87%
2.10%
-4.51%
-3.58%
-0.65%
10.50%
-4.70%
8.90%
4.34%
-8.57%
12.15%
-10.80%
-15.16%
4.29%
2.15%
2.24%
-7.56%
3.66%
6.51%
7.83%
4.34%
5.37%
-1.05%
13.79%
3.79%
10.30%
13.73%
-4.95%
-12.02%
-3.82%
-8.87%
-16.32%
-2.19%
6.53%
-6.53%
-2.87%
-0.34%
0.53%
4.30%
-16.23%

-7.72%
3.89%
-7.20%
17.91%
2.84%
-0.01%
-2.09%
-3.31%
2.96%
6.49%
-0.46%
-6.53%
2.78%
1.55%
2.34%
4.42%
5.24%
5.66%
2.43%
2.01%
-4.99%
-7.53%
1.22%
-2.93%
6.10%
-3.89%
6.68%
-0.62%
-4.00%
4.72%
3.25%
-2.60%
2.51%
2.67%
-3.34%
-2.21%
-1.90%
0.74%
5.94%
1.24%
1.18%
-2.67%
-1.21%
6.76%
0.63%
2.87%
-4.72%

-7.84%
4.23%
-7.40%
19.09%
2.79%
-0.10%
-2.01%
-3.41%
2.94%
6.65%
-0.56%
-6.84%
2.88%
1.57%
2.39%
4.51%
5.44%
5.91%
2.57%
2.15%
-5.13%
-8.15%
1.23%
-3.15%
6.35%
-4.17%
6.91%
-0.54%
-4.33%
5.14%
3.22%
-2.79%
2.47%
3.00%
-3.44%
-2.50%
-1.86%
0.56%
6.09%
1.23%
1.20%
-2.88%
-1.05%
7.11%
0.59%
3.20%
-4.94%

-7.95%
4.57%
-7.60%
20.26%
2.73%
-0.19%
-1.94%
-3.52%
2.92%
6.80%
-0.67%
-7.15%
2.97%
1.59%
2.44%
4.60%
5.64%
6.17%
2.71%
2.29%
-5.26%
-8.78%
1.24%
-3.36%
6.61%
-4.44%
7.14%
-0.46%
-4.67%
5.55%
3.20%
-2.97%
2.44%
3.34%
-3.55%
-2.80%
-1.82%
0.38%
6.24%
1.22%
1.21%
-3.09%
-0.90%
7.47%
0.55%
3.53%
-5.16%

-8.07%
-8.18%
-8.30%
-8.41%
4.91%
5.25%
5.59%
5.93%
-7.80%
-8.00%
-8.20%
-8.40%
21.43% 22.61% 23.78% 24.95%
2.68%
2.63%
2.57%
2.52%
-0.28%
-0.38%
-0.47%
-0.56%
-1.86%
-1.78%
-1.70%
-1.62%
-3.63%
-3.74%
-3.85%
-3.96%
2.90%
2.88%
2.86%
2.84%
6.96%
7.11%
7.26%
7.42%
-0.77%
-0.87%
-0.98%
-1.08%
-7.46%
-7.77%
-8.08%
-8.39%
3.07%
3.17%
3.27%
3.37%
1.61%
1.63%
1.65%
1.67%
2.49%
2.53%
2.58%
2.63%
4.70%
4.79%
4.88%
4.97%
5.84%
6.04%
6.24%
6.44%
6.42%
6.67%
6.92%
7.18%
2.84%
2.98%
3.12%
3.26%
2.44%
2.58%
2.72%
2.86%
-5.40%
-5.54%
-5.67%
-5.81%
-9.40% -10.03% -10.65% -11.28%
1.25%
1.26%
1.27%
1.27%
-3.57%
-3.79%
-4.00%
-4.21%
6.86%
7.12%
7.37%
7.62%
-4.71%
-4.98%
-5.25%
-5.52%
7.36%
7.59%
7.82%
8.04%
-0.38%
-0.29%
-0.21%
-0.13%
-5.00%
-5.34%
-5.67%
-6.01%
5.97%
6.39%
6.81%
7.22%
3.17%
3.15%
3.12%
3.10%
-3.16%
-3.34%
-3.53%
-3.71%
2.40%
2.37%
2.33%
2.30%
3.67%
4.00%
4.34%
4.67%
-3.65%
-3.75%
-3.85%
-3.95%
-3.09%
-3.38%
-3.67%
-3.97%
-1.77%
-1.73%
-1.68%
-1.64%
0.20%
0.02%
-0.16%
-0.33%
6.39%
6.54%
6.69%
6.84%
1.21%
1.20%
1.19%
1.18%
1.23%
1.25%
1.26%
1.28%
-3.29%
-3.50%
-3.71%
-3.92%
-0.74%
-0.58%
-0.42%
-0.26%
7.82%
8.18%
8.53%
8.89%
0.51%
0.47%
0.42%
0.38%
3.85%
4.18%
4.50%
4.83%
-5.38%
-5.61%
-5.83%
-6.05%

-2.46%
1.22%
6.06%
-0.93%
-2.19%
3.04%
0.84%
2.59%
3.28%
-1.13%
6.37%
1.78%
-0.40%
-6.54%
-9.08%
7.24%
18.13%
-10.91%
1.77%
-10.98%
3.04%
-2.07%
-11.21%
3.47%
-6.51%
-3.17%
2.46%
9.56%
10.09%
-9.68%
-11.58%
-6.85%

-2.72%
1.19%
6.13%
-1.04%
-2.74%
3.34%
0.77%
2.65%
3.43%
-1.57%
6.24%
1.84%
-0.31%
-6.81%
-9.30%
7.35%
18.81%
-10.90%
1.86%
-11.20%
3.78%
-2.15%
-11.57%
3.45%
-6.83%
-3.28%
2.58%
9.71%
10.68%
-9.79%
-11.95%
-7.26%

-2.98%
1.15%
6.20%
-1.16%
-3.29%
3.64%
0.70%
2.72%
3.59%
-2.02%
6.12%
1.91%
-0.21%
-7.08%
-9.52%
7.46%
19.49%
-10.90%
1.95%
-11.42%
4.51%
-2.23%
-11.93%
3.44%
-7.15%
-3.40%
2.70%
9.85%
11.28%
-9.90%
-12.32%
-7.67%

-3.25%
1.12%
6.27%
-1.28%
-3.84%
3.94%
0.63%
2.79%
3.74%
-2.46%
5.99%
1.98%
-0.12%
-7.36%
-9.74%
7.57%
20.16%
-10.89%
2.04%
-11.64%
5.25%
-2.32%
-12.29%
3.42%
-7.47%
-3.51%
2.83%
10.00%
11.87%
-10.00%
-12.69%
-8.08%

-3.51%
1.08%
6.34%
-1.40%
-4.39%
4.24%
0.57%
2.86%
3.89%
-2.91%
5.87%
2.05%
-0.03%
-7.63%
-9.95%
7.68%
20.84%
-10.88%
2.14%
-11.86%
5.98%
-2.40%
-12.65%
3.41%
-7.78%
-3.63%
2.95%
10.15%
12.46%
-10.11%
-13.06%
-8.50%

-3.77%
1.04%
6.41%
-1.51%
-4.94%
4.55%
0.50%
2.93%
4.05%
-3.35%
5.75%
2.11%
0.07%
-7.90%
-10.17%
7.79%
21.52%
-10.88%
2.23%
-12.08%
6.72%
-2.48%
-13.01%
3.40%
-8.10%
-3.74%
3.07%
10.29%
13.05%
-10.22%
-13.43%
-8.91%

-4.03%
1.01%
6.48%
-1.63%
-5.49%
4.85%
0.43%
3.00%
4.20%
-3.79%
5.62%
2.18%
0.16%
-8.17%
-10.39%
7.90%
22.20%
-10.87%
2.32%
-12.30%
7.45%
-2.57%
-13.38%
3.38%
-8.42%
-3.85%
3.19%
10.44%
13.64%
-10.33%
-13.79%
-9.32%

30%
70%

25%
75%

20%
80%

15%
85%

10%
90%

5%
95%

0%
100%

0.143%
0.06

0.141%
0.06

0.140%
0.07

0.138%
0.07

0.137%
0.07

0.135%
0.07

0.133%
0.07

0.143%
4.662%

0.141%
5.091%

0.140%
5.536%

0.138%
5.994%

0.137%
6.462%

0.135%
6.938%

0.133%
7.420%

7.000%

8.000%

VARIANCE, CORRELATION, BETA OF MS

Date
MS returnSP500 return
6/1/2011
-2.32%
-2.28%
5/2/2011
-2.87%
-1.35%
4/1/2011
2.10%
2.85%
3/1/2011
-4.51%
-0.10%
2/1/2011
-3.58%
3.20%
1/3/2011
-0.65%
2.26%
12/1/2010
10.50%
6.53%
11/1/2010
-4.70%
-0.23%
10/1/2010
8.90%
3.69%
9/1/2010
4.34%
8.76%
8/2/2010
-8.57%
-4.74%
7/1/2010
12.15%
6.88%
6/1/2010 -10.80%
-5.39%
5/3/2010 -15.16%
-8.20%
4/1/2010
4.29%
1.48%
3/1/2010
2.15%
5.88%
2/1/2010
2.24%
2.85%
1/4/2010
-7.56%
-3.70%
12/1/2009
3.66%
1.78%
11/2/2009
6.51%
5.74%
10/1/2009
7.83%
-1.98%
9/1/2009
4.34%
3.57%
8/3/2009
5.37%
3.36%
7/1/2009
-1.05%
7.41%
6/1/2009
13.79%
0.02%
5/1/2009
3.79%
5.31%
4/1/2009
10.30%
9.39%
3/2/2009
13.73%
8.54%
2/2/2009
-4.95%
-10.99%
1/2/2009 -12.02%
-8.57%
12/1/2008
-3.82%
0.78%
11/3/2008
-8.87%
-7.48%
10/1/2008 -16.32%
-16.94%
9/2/2008
-2.19%
-9.08%
8/1/2008
6.53%
1.22%
7/1/2008
-6.53%
-0.99%
6/2/2008
-2.87%
-8.60%
5/1/2008
-0.34%
1.07%
4/1/2008
0.53%
4.75%
3/3/2008
4.30%
-0.60%
2/1/2008 -16.23%
-3.48%
1/2/2008
-8.41%
-6.12%
12/3/2007
5.93%
-0.86%
11/1/2007
-8.40%
-4.40%

Covariance SP500&MS:
0.00223891
Variance MS:
0.01
Variance SP500:
0
Correlation:
0.67
Beta MS :
1.08
SUMMARY OUTPUT FOR REGRESSION
Y variable SP500 - independent
Regression Statistics
Multiple R
0.67
R Square
0.44
Adjusted R Square
0.44
Standard Error
0.06
Observations
120
ANOVA
df
Regression
Residual
Total

Intercept
X Variable 1

1
118
119
Coefficients
0
1.08

10/1/2007
9/4/2007
8/1/2007
7/2/2007
6/1/2007
5/1/2007
4/2/2007
3/1/2007
2/1/2007
1/3/2007
12/1/2006
11/1/2006
10/2/2006
9/1/2006
8/1/2006
7/3/2006
6/1/2006
5/1/2006
4/3/2006
3/1/2006
2/1/2006
1/3/2006
12/1/2005
11/1/2005
10/3/2005
9/1/2005
8/1/2005
7/1/2005
6/1/2005
5/2/2005
4/1/2005
3/1/2005
2/1/2005
1/3/2005
12/1/2004
11/1/2004
10/1/2004
9/1/2004
8/2/2004
7/1/2004
6/1/2004
5/3/2004
4/1/2004
3/1/2004
2/2/2004
1/2/2004
12/1/2003

24.95%
2.52%
-0.56%
-1.62%
-3.96%
2.84%
7.42%
-1.08%
-8.39%
3.37%
1.67%
2.63%
4.97%
6.44%
7.18%
3.26%
2.86%
-5.81%
-11.28%
1.27%
-4.21%
7.62%
-5.52%
8.04%
-0.13%
-6.01%
7.22%
3.10%
-3.71%
2.30%
4.67%
-3.95%
-3.97%
-1.64%
-0.33%
6.84%
1.18%
1.28%
-3.92%
-0.26%
8.89%
0.38%
4.83%
-6.05%
-4.03%
1.01%
6.48%

1.48%
3.58%
1.29%
-3.20%
-1.78%
3.25%
4.33%
1.00%
-2.18%
1.41%
1.26%
1.65%
3.15%
2.46%
2.13%
0.51%
0.01%
-3.09%
1.22%
1.11%
0.05%
2.55%
-0.10%
3.52%
-1.77%
0.69%
-1.12%
3.60%
-0.01%
3.00%
-2.01%
-1.91%
1.89%
-2.53%
3.25%
3.86%
1.40%
0.94%
0.23%
-3.43%
1.80%
1.21%
-1.68%
-1.64%
1.22%
1.73%
5.08%

11/3/2003
-1.63%
0.71%
10/1/2003
-5.49%
5.50%
9/2/2003
4.85%
-1.19%
8/1/2003
0.43%
1.79%
7/1/2003
3.00%
1.62%
6/2/2003
4.20%
1.13%
5/1/2003
-3.79%
5.09%
4/1/2003
5.62%
8.10%
3/3/2003
2.18%
0.84%
2/3/2003
0.16%
-1.70%
1/2/2003
-8.17%
-2.74%
12/2/2002 -10.39%
-6.03%
11/1/2002
7.90%
5.71%
10/1/2002
22.20%
8.64%
9/3/2002 -10.87%
-11.00%
8/1/2002
2.32%
0.49%
7/1/2002 -12.30%
-7.90%
6/3/2002
7.45%
-7.25%
5/1/2002
-2.57%
-0.91%
4/1/2002 -13.38%
-6.14%
3/1/2002
3.38%
3.67%
2/1/2002
-8.42%
-2.08%
1/2/2002
-3.85%
-1.56%
12/3/2001
3.19%
0.76%
11/1/2001
10.44%
7.52%
10/1/2001
13.64%
1.81%
9/4/2001 -10.33%
-8.17%
8/1/2001 -13.79%
-6.41%
7/2/2001
-9.32%
-1.07%
6/1/2001 n/a
not available

regression coefficient

R REGRESSION
According to Yahoo, beta of Miscrosoft is 0.97,
little less risky than the market. However, beta we
got using regression is 1.08, slightly above. The
fact that we used only 10 years of data could be
one of the reasons for dicrepency. Also, beta is
usually calculated using WEEKLY data, not monthly
data, perhaps that was additional discrepency
reason as well.

SS
0.29
0.37
0.66

MS
0.29
0

F Significance F
94.03
0

Standard Error t Stat

P-value Lower 95%
Upper 95%
Lower 95.0%
Upper 95.0%
0.01
-0.09
0.93
-0.01
0.01
-0.01
0.01
0.11
9.7
0
0.86
1.3
0.86
1.3

CAPM CALCULATION
CAPM DATA

rM
rRF

1.08
0.02 (annulized 0.0017x12 avg monthly return = 2.04% close to year to day returns:ht
0.03 (0.0294 according to: http://www.bloomberg.com/markets/rates-bonds/governme

ri = rRF + (rM-rRF)
ri= 0.0294 + 1.08 (0.0204-0.0294)
ri = 0.0294 + 1.08 (-0.009)
ri = 0.0294 + (-0.009720)
ri = 0.019680
ri = 1.968%

MS stock is slightly more risky than the market. Based on t

beta, MS is about 8% riskier comparing to the SP500 mark
index. Based on that risk, investor demand 1.968% return
MS stock should generally follow the return of the market a
less than 10% risky. However, a more detailed analysis wil
provide us with the information that MS is slightly more vo
comparing to the market, however within the acceptable r
Correlation between MS and SP500 also indicates that MS
generally corelates with SP. Historical graph below shows
trend that MS is generally foloowing the SP, but it is a bit m
volitile, and thus more risky.

30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
-5.00%
-10.00%
-15.00%
-20.00%
MS return
SP500 return
12345678910
111
21
31
41
51
61
71
82
92
02
122
32
42
52
62
72
83
93
03
13
233
43
53
63
73
84
94
04
14
24
344
54
64
74
85
95
05
15
25
35
455
65
75
86
96
06
16
26
36
46
566
76
87
97
07
17
27
37
47
57
677
88
98
08
18
2

ear to day returns:http://www.standardandpoors.com/indices/sp-500/en/us/?indexId=spusa-500-usduf--p-us-l--)

tes-bonds/government-bonds/us/)

e market. Based on the

g to the SP500 market
mand 1.968% return. The
eturn of the market as its
detailed analysis will
MS is slightly more volitile
thin the acceptable range.
so indicates that MS will
l graph below shows the
he SP, but it is a bit more

00 return
6
46
566
76
87
97
07
17
27
37
47
57
677
88
98
08
18
28
38
48
58
68
7899
09
19
29
39
49
59
69
79
8100
9101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120

a-500-usduf--p-us-l--)