FINA 6421: Homework 3/4Please submit onehomework answer set for your group, along with individualversions of your code for each member of the team. Groups are expected to work together, but all individuals are expected to maintain their own uniquecode base (code submissions mustbe different for each person in the team). The best way to learn the material is to think about how you want to structure your code together as a team, and then actually implement it yourself!For questions ___, load the monthly stock data and “Fama-French” factors in Python. Use the methodology in Module3_RegressionAndCAPM_ipynb to get the data frame excessReturns.1)Regress excess returns for CAT on an intercept and the excess return of the market (ie, test the validity of the CAPM for CAT). Please provide the estimates and standard errors for both the intercept and the market beta. Also report the regression R2. (15 points)2)What would you expect the excess return of CAT to be if the market returned the following: (15 points)a.1%b.1.5%c.-2.5%d.0%e.-5.5%3)Run a hypothesis test for the null hypothesis that the coefficient on the intercept (‘alpha’) is zero. Can you reject this hypothesis at a 5% confidence level (ie, you reject if the probability of getting the alpha we saw or a value more extreme on either side of zero is less than 5%). Why or why not? (15 points)4)Plot CAT excess returns on the y-axis versus market excess returns on the x-axis. Add a trend line to your plot that corresponds to the fit OLS model from part 1. Make the trend line red. (15 points)For questions on options, use this option set-up: Suppose we have a stock with a current price of ，Consider a European call option on this stock with a strike price of K=$50, time to expiration of T = 3 months (1/4 of a year).5)Is this option currently in the money, out of the money, or at the money? (5 points)6)Plot the option payoff (ie, at date T = ¼) as a function of final stock price, for all final prices between $40 and $60. (15 points)7)Suppose that the distribution of the change in the stock price between now and the option expiration is normal with a mean of zero and a variance of one. Generate 100000 normal random variables, and use these to find the expected payoff of the option given the current stock price of $49.25. (20 points)代写CS Finance|建模|代码|系统|报告|考试编程类：C代写,JAVA代写,数据库代写,WEB代写,Python代写,Matlab代写,GO语言,R代写金融类：统计，计量，风险投资，金融工程，R语言，Python语言，Matlab，建立模型，数据分析，数据处理服务类：Lab/Assignment/Project/Course/Qzui/Midterm/Final/Exam/Test帮助代写代考辅导天才写手,代写CS,代写finance,代写statistics,考试助攻E-mail:[email protected]微信：BadGeniuscs 工作时间：无休息工作日-早上8点到凌晨3点如果您用的手机请先保存二维码到手机里面，识别图中二维码。如果用电脑，直接掏出手机果断扫描。

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