Q1 Import stock prices of NASDAQ Compsite Index, Microsoft and Walmart for the last 30 years.

## # A tibble: 15,116 x 8
## # Groups:   symbol [2]
##    symbol date        open  high   low close    volume adjusted
##    <chr>  <date>     <dbl> <dbl> <dbl> <dbl>     <dbl>    <dbl>
##  1 MSFT   1989-11-10 0.583 0.590 0.582 0.587  59168000    0.379
##  2 MSFT   1989-11-13 0.587 0.613 0.582 0.612 178905600    0.395
##  3 MSFT   1989-11-14 0.616 0.620 0.597 0.601  95241600    0.388
##  4 MSFT   1989-11-15 0.602 0.620 0.599 0.615  94492800    0.397
##  5 MSFT   1989-11-16 0.618 0.620 0.599 0.608  68054400    0.392
##  6 MSFT   1989-11-17 0.609 0.613 0.602 0.603  31651200    0.389
##  7 MSFT   1989-11-20 0.602 0.602 0.587 0.601  56937600    0.388
##  8 MSFT   1989-11-21 0.601 0.615 0.601 0.612  67116800    0.395
##  9 MSFT   1989-11-22 0.613 0.615 0.608 0.613  38230400    0.396
## 10 MSFT   1989-11-24 0.617 0.618 0.608 0.609  17971200    0.393
## # … with 15,106 more rows

Q2 Calculate yearly returns.

## # A tibble: 62 x 3
## # Groups:   symbol [2]
##    symbol date       yearly.returns
##    <chr>  <date>              <dbl>
##  1 MSFT   1989-12-29         0.0296
##  2 MSFT   1990-12-31         0.730 
##  3 MSFT   1991-12-31         1.22  
##  4 MSFT   1992-12-31         0.151 
##  5 MSFT   1993-12-31        -0.0556
##  6 MSFT   1994-12-30         0.516 
##  7 MSFT   1995-12-29         0.436 
##  8 MSFT   1996-12-31         0.883 
##  9 MSFT   1997-12-31         0.564 
## 10 MSFT   1998-12-31         1.15  
## # … with 52 more rows

Q3 Which of the three stocks has the highest expected yearly return?

## # A tibble: 2 x 2
##   symbol returns_avg
##   <chr>        <dbl>
## 1 MSFT         0.283
## 2 WMT          0.159

Out of the 3 stocks Microsoft has the highest yearly return, 0.284 ## Q4 Calculate standard deviation of the yearly returns. Which of the three stocks is the riskiest in terms of standard deviation?

## # A tibble: 2 x 2
## # Groups:   symbol [2]
##   symbol  sd.1
##   <chr>  <dbl>
## 1 MSFT   0.410
## 2 WMT    0.326

Out of the 3 stocks with the standard deviation, Microsoft is the riskiest. Microsoft sd is 0.408 compared to NASDAQ which is 0.277 and Walmart, 0.326.

Q5 Is the standard deviation appropriate measure of risk for the three stocks? Calculate skewness and kurtosis, and make your argument using them.

## # A tibble: 2 x 2
## # Groups:   symbol [2]
##   symbol skewness.1
##   <chr>       <dbl>
## 1 MSFT        0.230
## 2 WMT         1.37
## # A tibble: 2 x 2
## # Groups:   symbol [2]
##   symbol kurtosis.1
##   <chr>       <dbl>
## 1 MSFT        0.220
## 2 WMT         1.36

During standard deviation the first thing you have to take into account is the downside risk. Each one of the stocks skewness is postive as well as a positive kurtosis which should result in postive returns. Out of the 3, Walmart skewness and kurtosis is the highest which could mean the highest returns

Q6 Calculate VaR, a downside risk measure, with a confidence interval of 0.99. Which of the three stocks has the greatest downside risk in terms of VaR?

Hint: This is not to be confused with HistoricalVaR you calculated in class. Look for the right code, using tq_performance_fun_options().

##                                           [,1]      [,2]     
## symbol                                    "MSFT"    "WMT"    
## DownsideDeviation(0%)                     "0.1448"  "0.0835" 
## DownsideDeviation(MAR=0.833333333333333%) "0.1475"  "0.0872" 
## DownsideDeviation(Rf=0%)                  "0.1448"  "0.0835" 
## GainDeviation                             "0.3295"  "0.3131" 
## HistoricalES(95%)                         "-0.5362" "-0.2471"
## HistoricalVaR(95%)                        "-0.3317" "-0.2215"
## LossDeviation                             "0.2388"  "0.0890" 
## MaximumDrawdown                           "0.6285"  "0.3284" 
## ModifiedES(95%)                           "-0.5008" "-0.4960"
## ModifiedVaR(95%)                          "-0.3513" "-0.2239"
## SemiDeviation                             "0.2726"  "0.1714"

Q7 Calculate Sharpe ratios with an annualized risk-free rate of 2% and a confidence interval of 0.99. Which of the three stocks would you choose?

Hint: Make your argument based on the three calculated Sharpe Ratios.

Q8 Hide the messages and the code, but display results of the code from the webpage.

Hint: Use message, echo and results in the chunk options. Refer to the RMarkdown Reference Guide.

Q9 Display the title and your name correctly at the top of the webpage.

Q10 Use the correct slug.