Assume that the spreadsheet below shows the closing prices f

Assume that the spreadsheet below shows the closing prices for the S&P 500 Index for the month of November 2012. Using a column with six decimal places:

a. Calculate the daily percentage changes in the S&P 500 Index. The last daily change is for 11/1/2012, resulting in 21 daily changes.

b. Calculate the average daily change in the Index, shown to 6 decimal places.

c. State the average daily change in the S&P500 Index for the month of November 2012 as a

percentage.

d. State the implied monthly change in the S&P 500 Index for the month of November 2012 as a percentage. (Notice the word implied—this in fact is not the correct percentage change for the month, as we will learn when we discuss the difference between the arithmetic mean and the geometric mean).

Date Closing Pr

11/30/2012 1,400.38

11/29/2012 1,398.26

11/28/2012 1,390.84

11/27/2012 1,385.35

11/23/2012 1,375.93

11/22/2012 1,394.35

11/21/2012 1,390.71

11/20/2012 1,413.4

11/19/2012 1,426.63

11/16/2012 1,425.35

11/15/2012 1,423.57

11/14/2012 1,408.66

11/13/2012 1,403.04

11/12/2012 1,403.58

11/9/2012 1,388.28

11/8/2012 1,397.68

11/7/2012 1,392.57

11/6/2012 1,418.26

11/5/2012 1,407.49

11/2/2012 1,413.9

11/1/2012 1,409.34

10/31/2012 1,385.59

Average =

Solution

Daily chnage = (Day price-previous day price)/Day price

Avergae change is average of 20 daily changes

Monthly change = (Price on 30 Nov- Price on 31st Oct)/(Price on 31st October)