1) Do you think that combining Apple and Microsoft shares would be relevant for a diversified portfolio? Explain your views (5 points) 2) Between the Dow Jones industrial, the S\&P 100, the S\&P 500 and the NASDAQ 100, which index do you think would be the most appropriate to benchmark the performance of your diversified portfolio? Justify your choice. (5 points) 3) The Dow Jones Industrial is a price-weighted average of the stocks of 30 large companies listed on stock exchanges in the United States. What does price-weighted average mean and what is its main drawback? (5 points) 4) Compute beta for Microsoft and Apple shares using S8P500 as a benchmark. Round the beta with two decimals. Refer to the appendix to find the appropriate correlation coefficients and standard deviations. (5 points) 5) Compute an estimated return of Microsoft and Apple share with CAPM. Estimated return of the market is 10% and the return of US T.Bills is 1%. Give an interpretation of your results, (5 points) 6) If the actual returns of Microsoft and Apple in one year are respectively 10% and 11%, are the shares underpriced or overpriced? (5 points) 7) Compute the expected return of the portfolio P, combining 50% of Microsoft and 50% of Apple, Use the expected returns computed in question 4 (use actual returns of question 5 only if you have not been able to compute expected return in question 4). (5 points) 8) Compute the beta of your portfolio P1. (5 points)