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

## # A tibble: 22,677 x 8
## # Groups:   symbol [3]
##    symbol date        open  high   low close    volume adjusted
##    <chr>  <date>     <dbl> <dbl> <dbl> <dbl>     <dbl>    <dbl>
##  1 ^IXIC  1990-04-24  422.  422.  419.  419. 126790000     419.
##  2 ^IXIC  1990-04-25  420   421.  419.  421. 121710000     421.
##  3 ^IXIC  1990-04-26  422.  422   419.  421. 115930000     421.
##  4 ^IXIC  1990-04-27  421.  421.  418.  418  116010000     418 
##  5 ^IXIC  1990-04-30  418.  420.  417   420. 105790000     420.
##  6 ^IXIC  1990-05-01  422   422.  421.  422. 124130000     422.
##  7 ^IXIC  1990-05-02  423.  424.  422.  424. 143260000     424.
##  8 ^IXIC  1990-05-03  425   427.  424.  425. 160850000     425.
##  9 ^IXIC  1990-05-04  427.  429.  426.  429. 136810000     429.
## 10 ^IXIC  1990-05-07  429.  432.  429.  431. 122690000     431.
## # … with 22,667 more rows

Q2 Calculate yearly returns.

## # A tibble: 93 x 3
## # Groups:   symbol [3]
##    symbol date       yearly.returns
##    <chr>  <date>              <dbl>
##  1 ^IXIC  1990-12-31        -0.108 
##  2 ^IXIC  1991-12-31         0.569 
##  3 ^IXIC  1992-12-31         0.155 
##  4 ^IXIC  1993-12-31         0.147 
##  5 ^IXIC  1994-12-30        -0.0320
##  6 ^IXIC  1995-12-29         0.399 
##  7 ^IXIC  1996-12-31         0.227 
##  8 ^IXIC  1997-12-31         0.216 
##  9 ^IXIC  1998-12-31         0.396 
## 10 ^IXIC  1999-12-31         0.856 
## # … with 83 more rows

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

Microsoft has the highest expected return

## # A tibble: 3 x 2
##   symbol returns_avg
##   <chr>        <dbl>
## 1 ^IXIC        0.137
## 2 MSFT         0.275
## 3 WMT          0.160

Q4 Calculate standard deviation of the yearly returns. Which of the three stocks is the riskiest in terms of standard deviation?

based off of standard deviation Microsoft would be the riskiest investment

## # A tibble: 3 x 2
## # Groups:   symbol [3]
##   symbol  sd.1
##   <chr>  <dbl>
## 1 ^IXIC  0.278
## 2 MSFT   0.403
## 3 WMT    0.328

Q5 Is the standard deviation appropriate measure of risk for the three stocks? Calculate skewness and kurtosis, and discuss them in your answer.

## # A tibble: 3 x 2
## # Groups:   symbol [3]
##   symbol skewness.1
##   <chr>       <dbl>
## 1 ^IXIC       0.179
## 2 MSFT        0.272
## 3 WMT         1.42
## # A tibble: 3 x 2
## # Groups:   symbol [3]
##   symbol kurtosis.1
##   <chr>       <dbl>
## 1 ^IXIC       0.304
## 2 MSFT        0.424
## 3 WMT         1.52

skewness seems to be Walmart kurtosis seems to be Microsoft

Q6 Which of the three stocks poses greater downside risk? Calculate HistoricalES(95%), HistoricalVaR(95%), and SemiDeviation, and discuss them in your answer.

##                                           [,1]      [,2]      [,3]     
## symbol                                    "^IXIC"   "MSFT"    "WMT"    
## DownsideDeviation(0%)                     "0.1244"  "0.1448"  "0.0829" 
## DownsideDeviation(MAR=0.833333333333333%) "0.1279"  "0.1475"  "0.0866" 
## DownsideDeviation(Rf=0%)                  "0.1244"  "0.1448"  "0.0829" 
## GainDeviation                             "0.2050"  "0.3227"  "0.3157" 
## HistoricalES(95%)                         "-0.3991" "-0.5362" "-0.2471"
## HistoricalVaR(95%)                        "-0.3541" "-0.3317" "-0.2197"
## LossDeviation                             "0.1599"  "0.2388"  "0.0885" 
## MaximumDrawdown                           "0.6718"  "0.6285"  "0.3206" 
## ModifiedES(95%)                           "-0.4068" "-0.4907" "-0.5226"
## ModifiedVaR(95%)                          "-0.2974" "-0.3419" "-0.2183"
## SemiDeviation                             "0.1891"  "0.2663"  "0.1707"

Microsoft poses the greater downside risk. Nasdaq’s VaR is the largest. Nasdaq is at -0.35 and Microsoft is at -0.33.Microsofts ES is greater, that 5% chance that it loses up to -0.53% making microsoft the riskier option.

Q7 Which of the three stocks would you choose? Calculate the Sharpe ratios with an annualized risk-free rate of 2% and a default confidence interval of 0.95.

All depends on how you look at this.long term investng I would take microsoft. Short term investment would be the less risky option in walmart

## # A tibble: 3 x 4
## # Groups:   symbol [3]
##   symbol `ESSharpe(Rf=2%,p=95%… `StdDevSharpe(Rf=2%,p=95… `VaRSharpe(Rf=2%,p=95…
##   <chr>                   <dbl>                     <dbl>                  <dbl>
## 1 ^IXIC                   0.287                     0.420                  0.392
## 2 MSFT                    0.519                     0.633                  0.745
## 3 WMT                     0.267                     0.426                  0.639

Q7.a Repeat Q7 but at a confidence interval of 0.99. Does it change your answer in Q7?

With this numbers I am more likley to take my money and invest in walmart

## # A tibble: 3 x 4
## # Groups:   symbol [3]
##   symbol `ESSharpe(Rf=2%,p=99%… `StdDevSharpe(Rf=2%,p=99… `VaRSharpe(Rf=2%,p=99…
##   <chr>                   <dbl>                     <dbl>                  <dbl>
## 1 ^IXIC                   0.205                     0.420                  0.243
## 2 MSFT                    0.364                     0.633                  0.428
## 3 WMT                     0.140                     0.426                  1.13

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.