Go to finance.yahoo.com to determine how stocks are correlated with various indexes.
a. Enter "GE," the symbol for General Electric, and click "Get Quotes." Click on the chart, then check the "S&P" box and click "Compare." The chart compares the S&P returns with the returns on GE stock for the past year. What can you discern from this chart? You can choose various time periods from one day to five years. Repeat the exercise for some other time periods.
b. Add the NASDAQ and Dow indexes to the chart. Interpret the results and comment on GE's performance relative to the performances of the major indexes.
c. Deselect the S&P 500, NASDAQ, and Dow index options and click "Compare." Enter "IBM" and then click "Compare." The new chart will show a comparison of the returns for GE and IBM. Comment on the performance of GE and IBM and any interrelationship between the two.