1. You need to complete the below table by selecting ANY two stocks (except for Microsoft) on Nasdaq and collect the data on Dec 31 each year (or the last trading day in that year):

	Company 1s Name		Company 2s Name		Nasdaq Composite Includes Dividends
Year	Stock Price	Dividend (paid in the last quarter as of the year)	Stock Price	Dividend (paid in the last quarter as of the year)
2019
2018
2017
2016
2015
2014

2. Use the data you have collected to calculate annual returns for Company 1, Company 2, and the Market Index, and then calculate average returns over the five-year period. Give comments on your calculation results. Which stock has a higher retun?

3. Calculate the standard deviation of the returns for Company 1, Company 2, and the Market Index. Do you think the standard deviation can reflect the stocks risks? And why?

4. Construct a scatter diagram graph that shows Company 1s and Company 2s returns on the vertical axis and the Market Indexs returns on the horizontal axis. Whats the relationship between the two stocks from your observation?

5. Estimate or use data to find Company 1s and Company 2s betas, as the slopes of regression lines with stock returns on the vertical axis (y-axis) and market return on the horizontal axis (x-axis). Are these betas consistent with your graph? Do you think beta can reflect the stocks risks? And why?

6. You need to determine the risk-free rate. What will be your approach and why do you select this method? How much the rate will be?

7. Whats the market risk premium? Assume that the market risk premium is 5.5%. What is the expected return on the market? Use the SML equation to calculate the two companies' required returns.

8. If you formed a portfolio that consisted of 50% Company 1 stock and 50% Company 2 stock, what would be its beta and its required return? How will the portfolio hedge the risk?

9. Suppose an investor wants to include any one of the two stocks that you recommended in his or her portfolio. Stocks A, B, and C are currently in the portfolio, and their betas are 0.869, 1.985, and 1.02, respectively. Recommend a stock from the two stocks youve selected to her/him and calculate the new portfolios required return if it consists of 25% of the company youve recommended, 15% of Stock A, 40% of Stock B, and 20% of Stock C. Give your comments to risk of the new portfolio. Do you recommend it or not? And why?