Chapter 7

Data and Applications

Experience is the name everyone gives to their mistakes.

—Oscar Wilde

In this chapter, we analyze security level data at various reporting frequencies, extract returns, form minimum variance portfolios, construct efficient frontiers, apply the CAPM, and comment on several performance attribution measures. We also learn to work with statistical concepts in Excel, including estimation of covariances, correlations, betas to the market portfolio, means, variances, and risk measures. This work will be most closely related to the real-world applications that you will be required to analyze in subsequent study in this book.