1. Consider Table 5, which presents historical annual returns for stock 1 and stock 2, and Table 6 which outlines risk and return data for firm 1, firm 2, the riskless asset, and the market portfolio. Table 5 2018 4% 9% 2019 3% 11% Returns for stock 1 (%) Returns for stock 2 (%) 2017 5% 8% 2016 6% 7% 2015 1% 2% Table 6 Standard deviation Expected return Correlation with market portfolio Firm 1 14% 0.7 Firm 2 18% 0.6 Riskless asset 0% 4% 0.0 Market portfolio 10% 12% 1.0 (a) Consider Table 5. Calculate the average return and standard deviation return for stock 1 and stock 2. Detail all calculations that you use. (b) Consider Table 5. Calculate the covariance and correlation between the returns on stocks 1 and 2. Form a portfolio of stocks 1 and 2. Plot the minimum variance frontier for various combinations of stocks 1 and 2. Detail all calculations that you use. (c) Consider Table 6 and assume that the CAPM holds. Calculate beta of firm 1 and firm 2, and the expected return for firm 1 and firm 2. Detail all calculations that you use. (d) Consider Table 6 and assume that the CAPM holds. Plot the security market line (SML). Show where firm 1 and firm 2 are located on the SML. Detail all calculations that you use