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First, you need to pick a public company to analyze. You should have already informed me of the company you have picked.

A brief description of the components of the assignment follows:

1. COMPANY BACKGROUND (15 points) – This will include background information on your company, its industry, and competitors.

2. COMPANY STOCK PRICE ANALYSIS (20 points) – This will include daily tracking and analysis of the company’s common stock price AND the S&P 500 index from March 23rd (Monday) through April 10th (Friday). This is fifteen days of price changes and activities. Markets are not open on weekends or holidays.

3. A RISK AND RETURN ANALYSIS (15 Points) – This will include estimating the return on an investment in the stock of the company and a comparison of the risk of the company to that of some other companies in the same and other industries.

Notes on the Sawyer Library:
A major purpose of this assignment is to acquaint you with the incredible amount of information that is readily accessible in business libraries and on the internet. Sawyer Library is a very good library and the librarians at the reference section are very knowledgeable and helpful. Spend some time looking around, both online and on the shelf in the Business Reference sections.


You should, at a minimum:
• Describe the company and its main product or service lines, the general location of its facilities, and the geography of its markets. Recent history, including mergers, acquisitions, troubles, successes, and other points of interest should also be mentioned.
• Provide some basic financial data to describe the company. How big is it? Is it successful? Is it growing?
• Describe the company’s main industry.
• Identify major competitors and briefly compare these competitors to your company. Include financial indicators.
• Discuss recent economic conditions in the industry, as well as prospects for the future.

In short, this section should provide the background necessary to make subsequent sections interesting and understandable. TRY TO KEEP THIS TO 2-3 PAGES.

Starting points for background on the company and industry include Yahoo Finance and Google Finance. The company web page is a very good source of financial data, but descriptive info provided by the company is biased.


In this section, you will develop time series of DAILY closing prices of your company’s common stock price AND the S&P 500 stock market index. NOTE THAT THE CLOSING PRICE ON A DAY IS FOUND IN THE NEXT DAY’S PAPER. FRIDAY PRICES ARE FOUND IN THE MONDAY WALL STREET JOURNAL OR THE SATURDAY LOCAL PAPER.

A very valuable source for finance students is http://finance.yahoo.com/. The markets close everyday at 4:00 pm Eastern time. I suggest that every day between March 23rd (Monday) through April 10th (Friday), go to the Yahoo website after 4:00 p.m. Search for your company using the ticker symbol and check out the page. Also, check out the page for S&P 500 index (ticker symbol ^GSPC).

If your stock price AND/OR the S&P 500 market index moves up or down significantly during the period, you should try to determine what caused the change and discuss it in your paper. Writing down the volume of trading on the stock each day may be helpful. A dramatic rise in volume will give you an indication that something is up, indicating the existence of some news relevant to the future of your company. Note that volume changes reflect an interest in a stock, but are not a cause of a rise or fall in the price.

Prepare a table of the closing prices of the index and your company’s stock price. Compute the rate of return on both the index and your stock over the three weeks.


Here you will use the daily data to assess the risk and return of your company and others. As noted earlier, you should find information on your company, its industry, and its competitors in Yahoo Finance.

You can find information on stock betas in http://nasdaq.com/. Look in Summary Quotes.

The assignment is to estimate returns on your company and its competitors. The risk free rate is approximated by the 30-year U.S. Treasury Bill rate and can be obtained from almost any daily newspaper. You will need to calculate the expected return using the Capital Asset Pricing Model (CAPM). You can find the average long-term risk premium from the article by Jeremy J. Siegel posted in the Blackboard.

If bs differ across companies in the industry, you should think about why that might be and discuss it in your paper. In addition, you should think about whether the bs are consistent with the knowledge you now have about your company and discuss that as well.

To do well in this assignment, I suggest that you do the following:

– Track daily macro-economic and industry specific news that may influence the price of stocks.
– Draw graphs and produce interesting charts.
– I expect more detail on the second (Stock Price Analysis) and third (Risk and Return Analysis) parts of the assignments.
– Present intelligent discussions.
– Do not hesitate to offer your suggestion on the stocks (e.g., whether the stock has good growth potential, whether it is fairly valued, etc.)

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