Module 3 Chapter-F2F
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Module 3 – Stock Price Data Background
In this module, you will be working with stock price data for Amazon.com. This stock is listed on the NASDAQ Stock Market (the second largest U.S. stock market, after the New York Stock Exchange). You will analyze the change in the stock prices over time as well as the value of investments over time.
The Excel workbook for this module consists of 2 tabs.
1.
The source tab.
2.
The “Table” tab contains the full history of Amazon stock prices from its start in May 1997 until November 2017. For each trading day of the stock, a record of each of the following is posted.
Open
= the price when the market opened in the morning.
Close
= the price when the market closed in the afternoon.
High
= the highest price during that trading day.
Low
= the lowest price during that trading day.
Volume
= number of shares of the stock traded that day.
Adj Close
(Adjusted Close) = a price adjusted to make prices comparable over time.
Note that the dates are listed from most recent to least recent.
The Adjusted Close
price on specific day reflects all the dividends and splits since that day. If no such dividends or splits have occurred since that day, the adjusted close equals the close
on that day. The change in adjusted closing price is used to calculate the total return of an investment made on some previous date in history.
Part 0: Percent Change
Expressing the percent (or relative) change is often more effective when you are concerned with comparisons over time than the absolute change of the quantity. For an example, an absolute 1
change of 10 units is almost unnoticeable when the value of a quantity observed is 1000 units. However, that same 10 units more than doubles the value of a quantity of 8 units.
To begin this Module, view the screencast Percent Growth Models
.
Part 1: Daily Changes in Stock Prices
1)
Create a column in Excel that shows the difference
, in dollars and cents, between the High
and Low
prices for each day. Call the column Daily Range
. Note: you will write an
Excel formula in the first row of data and drag it down the whole column. a.
What was the Daily Range on 4/23/15?
2)
Create a column in Excel that shows the percentage increase
of the High over the Low. Call the column Daily Range %
. Show your answer as a percentage with two decimal places, e.g., 10.12%.
a.
What was the Daily Range % on 5/27/15?
3)
Create a column in Excel that shows the difference
, in dollars and cents, between the Adjusted Close that day and the
Adjusted Close the previous day
. Call the column Daily Change
.
2
Screencast
a.
What was the Daily Change on 3/17/16?
4)
Create a column in Excel that shows the percentage change (either increase or decrease)
of the Adjusted Close that day
compared to the Adjusted Close the previous
day
. Call the column Daily Change %
. Show your answer as a percentage with two decimal places, e.g., 10.12%.
a.
What was the Daily Change % on 6/6/14?
5)
For this problem, the Excel function XLOOKUP is useful. a.
Which day in the data set had the largest Daily Range?
b.
Which day in the data set had the smallest Daily Range?
c.
Which day in the data set had the largest Daily Range %?
3
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d.
Which day in the data set had the smallest Daily Range %?
e.
Which day in the data set had the largest positive Daily Change (i.e., biggest increase from the previous day)?
f.
Which day in the data set had the most negative Daily Change (i.e., biggest drop from the previous day)?
g.
Which day in the data set had the largest positive Daily Change %?
h.
Which day in the data set had the most negative Daily Change % (i.e., biggest percentage drop)?
6)
For what percentage of days in the data set was the Adjusted
Close
on the day lower than the Adjusted Close the previous day? Show your answer as a percentage with two decimal places, e.g., 10.12%.
4
7)
For what percentage of days in the data set was the Adjusted
Close
on a day higher than the Adjusted Close the previous day? Show your answer as a percentage with two decimal places, e.g., 10.12%. Is the sum of the answer to this question and the previous question equal to 100%? Why or why not?
8)
For what percentage of days in the data set was the Daily Change percentage a.
strictly greater than 0%?
b.
greater than or equal to 2.00%?
9)
For what percentage of days in the data set was the Daily Change percentage strictly greater than 2.00% and the volume traded was strictly less than 8,000,000?
5
6
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Part 2: Graphing
Using all the trading days on the “Table” tab, create a graph of Adjusted Close
price as a function of time. Label the horizontal axis with dates in a readable manner.
Here is an example of a nicely labeled graph using Close
prices for 2015. Create a graph for all the trading days in the data set.
250
300
350
400
450
500
550
600
650
700
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Price (USD)
Date
AMZN Close Price, 2015
Check your work by going to finance.yahoo.com and examining the historical price charts for AMZN over the whole life of the stock.
7
Part 3: Applying Adjustments
The data set shows the Adjusted Close prices. Adjustments help make the prices comparable over time and are necessary when the stock splits or pays dividends. (For this class, don’t worry if you don’t understand those actions.) The data set does not show the adjustments for the other prices given (Open, High, and Low). However, you can adjust those other prices using the ratio of the Adj. Close to the Close price. 1)
Find the Adjustment Ratio (=Adj. Close / Close price) for every trading day in the data set. Fill in the blank cells in the table below:
Date
Adj. Close/Close
6/2/97
0.083
8/23/99
1/5/01
10/25/05
1.000
3/4/16
8
2)
Create a line graph for the Adjustment Ratio as a function of trading days (Hint: Use the data for all the days in the data set, not just the values from the table in Question 1.)
3)
Looking at the graph, how many adjustments were made? 4)
Create columns in the data for Adjusted High price (=Adjustment Ratio x High) and Adjusted Low price (=Adjustment Ratio x Low). Use those columns to fill in the blank cells in the following table.
Date
Adj. High
Adj. Low
8/21/97
7/7/99
60.00
8/1/03
41.63
5)
Create a line graph showing both the Adjusted High and Adjusted Low prices for days from the first trading day (5/15/97) until December 31, 1999. 9
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Part 4: When to Use Close vs. Adj. Close
For each of the following scenarios, indicate whether this calculation would require (a) the close price, (b), the adjusted close price, or (c) both.
(i) You want to know how many shares you can afford on 8/6/98 if you have $10,000.
(ii) You want to know by what percentage the value of the stock has changed from 2/3/99 to 7/7/00.
(iii) You want to know what it will cost to buy 30 shares on 10/29/98.
10
(iv) You bought 30 shares on 6/18/98. You want to know what your investment would be worth on 10/13/00.
(v) You want to know the Adjustment Ratio on 8/6/99.
11
Part 5: Changes in Stock Prices Over Time
1)
Write formulas in Excel, using cell references, to calculate the following.
a.
How much did the Adjusted Close
price change, in dollars and cents, from the first trading day in the data set (5/15/97) until the most recent day in the data set (11/15/17)?
b.
How much did the Adjusted Close
price change, in percentage growth, from the first trading day in the data set (5/15/97) to the most recent day in the data set (11/15/17)? Show your answer as a percentage with two decimal places, e.g., 10.12%.
2)
Find how much the Adjusted Close
price changed, in dollars and cents, from the first trading day (5/15/97) to each date shown in the table below. Date
Adj. Close on
given day
Change in Adj. Close, from (5/15/97)
until the
given day
5/15/97
1.96
$0
1/2/98
4.96
$3.00
1/3/00
1/2/02
$9.00
1/3/05
3)
Find how much the Adjusted Close
price changed, as a percentage, from the first trading
day (5/15/97) to each date shown in the table below. Date
Adj. Close on
given day
Change in Adj. Close, as a percentage, from
(5/15/97) until the given day
5/15/97
12
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1/2/98
153.06%
1/3/00
1/2/02
459.18%
1/3/05
4)
You have $25,000 available to invest in AMZN stock on the first day of trading in the data set (5/15/97), purchased at the Close
price (
not
the Adjusted Close), purchasing only
whole shares. Fill in the following table:
Date
Close Price
Amount Available
to Invest
Shares
Purchased
Amount Invested
Unspent Cash
5/15/97
a.
How many shares did you buy?
b.
How much did you spend?
c.
Calculate the value
of your investment on the following dates. Hint: The percentage growth in investment value is the same as the percentage growth in the Adjusted Close
price.
Date
Adj.
Close
Price on
Change in
Adj Close
from (5/15/97)
% Change in
Adj. Close,
from (5/15/97)
Net
Gain/Loss
of
Current value of
investment
(including initial
13
given day
until the given
day
until the given
day
investment
investment), on
the given day
Purchase Date (5/15/97)
1/2/98
$3.00
153.06%
$38,235.46
$63,215.96
1/3/00
1/2/02
$9.00
459.18%
$139,686.88
1/3/05
11/15/17
Part 6: Investments
1)
You have $10,000 available to invest in AMZN stock on 1/3/00, purchased at the Close
price, purchasing only whole shares.
a.
How many shares did you buy?
14
b.
How much did you spend?
c.
Calculate the value of your investment on the following dates. Date
Value of investment on the given day
1/3/00
(date of original investment)
1/2/02
1/2/04
1/2/09
$6,033.96
Most recent trading day in the data set (11/15/17)
15
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2)
You have $10,000 available to invest in AMZN stock on 9/16/98, purchasing only whole shares at the Close
price, and then sold it on 5/3/99. You then used the proceeds of the sale to buy (whole) shares
again on 11/14/02 at the Close
price. a.
How many shares did you buy on 9/16/98? Your answer should be a whole number.
b.
How much did you spend on 9/16/98? Show your answer in dollars and cents.
c.
By what percentage did the Adj. Close price grow from 9/16/98 to 5/3/99? Show your answer as a percentage with two decimal places, e.g., 10.12%.
d.
What was the value of your shares when you sold on 5/3/99? Show your answer in dollars and cents.
e.
What was the Close
price on 11/14/02? Show your answer in dollars and cents.
f.
How many shares did you buy on 11/14/02? Your answer should be a whole number.
g.
How much did you spend on 11/14/02? Show your answer in dollars and cents.
h.
Counting the original (9/16/98) purchase and the second purchase (11/14/02), how much unspent cash did you have? Show your answer in dollars and cents.
i.
By what percentage did the Adj. Close price grow from 11/14/02 to the last trading day in the data se t(11/15/17)? Show your answer as a percentage with two decimal places, e.g., 10.12%.
j.
How much were the shares you purchased on 11/14/02 worth on the last trading day in the data set (11/15/17)? Show your answer in dollars and cents.
k.
Using the value of the shares on the last trading day in the data set (11/15/17) plus
the unspent cash, by what percentage did your original $10,000 grow? Show your answer as a percentage with two decimal places, e.g., 10.12%.
16
Part 7: Dollar-Cost Averaging “Dollar Cost Averaging” means sticking to a regular investment pattern, such as investing $1,000 every year, without trying to anticipate whether the price of the stock (or other investment) will rise or fall. 1)
You bought as many whole shares of AMZN stock as you could with $1,000 at the Close
price on the first trading day of each calendar year from 2001 until 2010. Fill in the blank
cells in the following table that show how many shares you bought and owned in each year.
a.
Table of Shares Bought in Each Year and Total Owned
As of
Close Price
# New shares
just purchased
Total # of
shares owned
1/2/01
72
72
1/2/02
1/2/03
51
1/2/04
1/3/05
22
1/3/06
1/3/07
1/2/08
311
1/2/09
1/4/10
b.
How much were the shares owned worth on the most recent trading day in the data set (11/15/17)? Is it correct to simply multiply (the total number of shares owned as of 1/4/10) by (the Close price on the most recent trading day)? Why or why not?
17
c.
How much did you spend in total on these shares? (The answer will be under $10,000: somewhat less than $1,000 per year for ten years.)
2)
Fill in the table below, under the assumption that you bought as many whole shares of AMZN stock as you could with $1,000 at the Close
price on the first trading day of the month of July each year.
a.
Fill in the blank cells in the following table:
As of
Close Price
# New shares just purchased
Total # of shares owned
7/2/01
68
68
7/1/02
7/1/03
7/1/04
19
186
7/1/05
7/3/06
241
7/2/07
7/1/08
13
7/1/09
7/1/10
b.
How much were the shares owned worth on the most recent trading day in the data set (11/15/17)?
18
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c.
How much did you spend in total on these shares? (The answer will be under $10,000: somewhat less than $1,000 per year for ten years.)
Part 8: Compound Annual Growth and Extrapolation
1)
How much did AMZN Adjusted Close
grow, as a percentage, from the last trading day of 2012 (12/31/12) to last trading day of 2013 (12/31/13)? Show your answer as a percentage with two decimal places, e.g., 10.12%.
2)
The compound annual growth rate (CAGR)
for a span of years is a growth rate that, when compounded annually, yields the actual percentage growth over the whole period. Watch the screencast CAGR
for more information on computing the CAGR. (Use 1 year is equal to 365.25 days.)
What was the compound annual growth rate
(CAGR) in Adjusted Close
from the last trading day of 2008 (12/31/08) to the last trading day of 2013 (12/31/13)? Show your answer as a percentage with two decimal places, e.g., 10.12%.
3)
If the annual growth rate in Adjusted Close from the last day of 2013 to the last day of 2014 was the same as the CAGR in Adjusted Close from the end of 2008 through 2013 calculated above, what would the Adjusted Close of the stock be on the last trading day of 2014 (12/31/14), assuming no further adjustments and annual compounding? Show your answer in dollars and cents, e.g., 150.25.
19
Screencast
4)
If the annual growth rate in Adjusted Close from the last day of 2013 through the last day
of 2016 was the same as the CAGR from the end of 2008 through 2013 calculated above, what will the Adjusted Close of the stock be on the last trading day of 2016 (12/30/16), assuming no further adjustments and annual compounding? Show your answer in dollars and cents, e.g., 150.25.
5)
Create a graph in Excel that shows a) the actual daily stock prices (using Adjusted Close prices) from the end of 2008 through the last trading day in the data set (11/15/17). b) the Adjusted Close over that period if it grew smoothly at the 2008-2013 CAGR. Show the smooth growth trend starting from the end of 2008 out through the end of 2018.
6)
How many years are in the data set (5/15/97 to 11/15/17)? Show your answer as a number with two decimal places, e.g., 10.25.
7)
What was the CAGR
of the Adjusted Close
from the first trading day in the data set (5/15/97) to the last trading day in the data set (11/15/17)?
20
8)
Create a graph in Excel that shows a) the actual daily stock prices (using Adjusted Close prices) from the first trading day (5/15/97) through the last trading day in the data set (11/15/17), and b) the Adjusted Close if it grew smoothly at the CAGR. Use the CAGR computed over the whole data set. Show the smooth growth trend starting from the first trading day (5/15/97) out through the end of 2019.
9)
Write the equation for the curve of the smooth growth of the Adjusted Close as a function
of time t
, where t
is in days since the first trading day (5/15/97).
21
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Selected Answers
Part 1
2) On 5/27/15, Daily Range % = 1.61%.
3) On 3/17/16, Daily Change = -14.83.
5)
a) 6/9/17 (largest daily range, 85.99) b) 6/26/97 (smallest daily range, 0.12)
c) 9/1/98 (largest daily range %, 33.33%) d) 3/17/17 (smallest daily range %, 0.38%)
e) 10/27/17 (largest increase, 128.52) f) 1/29/16 (largest drop, -48.35)
g) 11/26/01 (largest daily increase %, 34.47%) 6) Down 49.20% of the days (2539 out of 5161 trading days--excluding the very first day--
because there's no previous day to compare to).
7) Up 50.13% of the days (2587 out of 5161 trading days). Note that 49.20% + 50.13% does not equal 100%. There are 35 trading days where the adjusted close price was the same as
the previous day.
Part 3
2) Note: this graph was created using all the points in the data set, not just the 5 you found in the problem above.
22
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0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
5/15/97
5/15/00
5/15/03
5/15/06
5/15/09
5/15/12
5/15/15
Adj Close/Close Ratio
3) 3 adjustments were made.
5) 0.00
20.00
40.00
60.00
80.00
100.00
120.00
5/15/97
9/
15/97
1/
15
/9
8
5/15/98
9/15
/98
1/1
5
/99
5
/
1
5/99
9
/15/99
AMZN Adj High and Low Prices: May 1997-
Dec 1999
Part 5
1) a) $1,124.73 b) 57384.18%
4) a) 1063 Part 6
23
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1)
a) 111 c) Value on most recent day: $125,062.59
2)
a) 118 b) $9,971.00 c) 436.01% e) $21.21 f) 2519
h) $46.42 i) 5212.07% k) 28281.79%
Part 7
1) b) $378,567.84. Multiplying the number of shares owned as of 1/4/10 by the Close price on the most recent trading day will give the correct value IF there have been no adjustments over that time period (i.e., Adj Close = Close). c) $9,805.29
Part 8
1) 58.96%
4) 1364.36
5) 0
500
1000
1500
2000
2500
3000
3500
12/31/08
12/31/10
12/31/12
12/31/14
12/31/16
12/31/18
AMZN Adj Close Price with Extrapolation of Dec 2008-Dec 2013 Growth
8)
24
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0
500
1000
1500
2000
2500
5/16/97
11/21/01
5/29/06
12/4/10
6/11/15
12/17/19
AMZN Adj Close Price with Extrapolation of 5/1997-11/2017 Growth
9) p(t) = 1.96 * (1+0.3633)^(t/365.25)
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%
%
c. Assume that the situation during Years 1 to 7 is expected to prevail in the future (i.e.,
x = TX, Average
↑ M
= TM,…
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Preview File Edit View Go Tools Window Help
V
mgt120h-j17.pdf
Page 5 of 10
C
b. 7
C.
d.
a.
b.
14
16
C.
d.
0
8. Assume you are a common shareholder evaluating the financial statements of your
company. In general, you would prefer to see what types of values for each of the
following financial ratios?
Number of days' sales in accounts receivable
High
High
Low
Low
U ●
CC
✩
V
Search
((.
Ơ
High
Low
Inventory turnover
High
Low
Sat Apr 15 2:53 PM
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Sketch the drawdown curve based on the monthly stock prices listed below:
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Need help with the earnings per share of common stock.
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EQUITY TRANSACTIONS JOURNAL ENTRIES
Use the following stock and equity transactions to record journals and prepare a
partial Balance Sheet:
HINT: you will need to keep track of the various equity accounts. I will give you two of
the accounts you will need: CS, Par and APIC, but there are a few others.
You may use a schedule/table, T accounts, or your own method.
1. Equity Financing Inc (EFI) is formed on Jan 1, 2020 and establishes 50,000 shares
of common stock authorized with a par value of $.50 per share.
2. EFI issues 4000 shares of CS to the founding owner in exchange for land with a
FMV of $5000 AND cash of $10,000.
3. On January 31, EFI sells 2000 shares of Common Stock for cash at $15 per share.
4. On March 31, EFI completes a 1 for 2 FORWARD stock split.
5. On June 15th EFI repurchases 1,000 shares of its own stock for $10 per share.
6. On November 15th, EFI declares a cash dividend payable in the next accounting
period of $1 per share outstanding.
7. Net income for the…
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Given the information in the table below, which company's stock has the highest total value?
Select one:
a.
Microsoft
b.
Block
c.
Adobe
d.
Oracle
Clear my choice
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There are 2 parts to this question please read and answer carefully using the table provided.
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Daily Stock Return Analysis
a. Data Download and Preparation (2p)
Download historical stock data for Tesla (TSLA), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and IBM from Yahoo Finance for the past 5 years, covering the period from September 1, 2019, to September 1, 2024.
Import the data into a spreadsheet and ensure the dataset includes the daily adjusted closing prices for each stock.
b. Daily Returns Calculation (3p)
Compute the daily returns for each stock using the formula:
Daily Return = (Current Price /Prior Period Price) – 1
Express the daily returns as percentages.
c. Descriptive Statistics (10p)
For each stock, calculate fallowing statistics for daily returns:
Mean Daily Return: The average daily return.
Standard Deviation of Daily Returns: A measure of the volatility of daily returns.
d. Histograms (5p)
Create histograms for the daily returns of each stock to visualize their distribution. Ensure that each histogram has appropriate titles and…
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Choose the correct. Which of the following is a registration statement used by large companies that already have a significant following in the stock market?a. Form 8–Kb. Form 10–Kc. Form S–1d. Form S–3
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How do I calculate those numbers
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Determine the amount to be reported as an investment in Herbert stock at December 31.
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Daily Stock Return Analysis
a. Data Download and Preparation (2p)
Download historical stock data for Tesla (TSLA), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and IBM from Yahoo Finance for the past 5 years, covering the period from September 1, 2019, to September 1, 2024.
Import the data into a spreadsheet and ensure the dataset includes the daily adjusted closing prices for each stock.
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