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 DJIA or S&P Indices- over
the same time period. 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 DJIA is DJIA. 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 time periods specified above. Then answer
the following questions:

1.	What is Apple?s beta given the 36-month data specified for this project? 
2.	Interpret your calculated beta. What does this figure show? Explain. 
3.	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.
4.	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.
5.	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.

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

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