Midterm

Exercise Set 4: Q 11

Exercise Set 4: Q 11

by Maria Inês Miranda Mota Alves -
Number of replies: 1

In question 11, I noticed that the analysis only considers data from line 267 onwards, ignoring values before 31/07/2016. Could you please explain why that earlier data was excluded? Also, why are the risk-free rates in the dataset divided by 12? 

In reply to Maria Inês Miranda Mota Alves

Re: Exercise Set 4: Q 11

by Diogo Manuel Gonçalves Luís -
Hi Maria,

In fact, the regression considers the cells from 249 to 308, you can validate this by redoing the regression - so please ignore that note.

Risk Free Rates in the dataset are divided by 12 as we want to use monthly returns and the 3M GECU3M Index provides annualized data.

Best,

Diogo