Answer Happy

1. The return profile and risk of the S\&P 500. In this exercise you will reproduce the graphs presented in class. The goal of this exercise is (i) to expand your datahandling skills, (ii) test your understanding of basic probability concepts using real data and (iii) develop an appreciation for the use of replicating a result to ensure that you understand it. Go to Yahoo Finance (finance.yahoo.com) and search for the ticker symbol SPY. On the left-hand side of the page you will see a link to "Historical Prices". Click on the link to get to the Historical Prices page and download the daily prices from 1/29/93 to 6/22/22. You will find a "Download Data" link at the bottom of the page. Also download all dividends (the dividends are in a separate file).
(d) Add a Gaussian distribution to the semi-log graph of the CDF of the SPY returns. Begin by calculating the mean AVERAGE() and standard deviation STDEV() of the ordered returns. Highlight these in your homework so your 1 GSI can see them. Use them to calculate the cumulative Gaussian distribution (NORMDIST() and 1 - NORMDIST()) in the column next to your last cumulative distribution calculation. Make a copy of the graph from the part (1c) above and add the cumulative Gaussian distribution to the copy.