6. The following table presents the realized annual return for S&P 500 and Microsoft from the beginning of 1996 to the end of 2003. Year end S&P 500 Microsoft 1996 21.2% 88.3% 1997 30.3% 56.4% 1998 22.3% 114.6% 1999 25.3% 68.4% 2000 -11.0% -62.8% 2001 -11.3% 52.7% 2002 -20.8% -22.0% 2003 33.1% 6.9% (a) [2 points) Calculate the average annual returns for S&P 500 and Microsoft. (b) [3 points) Calculate the average annual realized returns for S&P 500 and Mi- crosoft. (c) [4 points) Estimate the volatilities of the return for S&P 500 and Microsoft. (d) [5 points) Estimate the covariance and correlation between S&P 500 and Mi- crosoft. (e) [2 points) Originally, Microsoft is listed in Nasdaq. However, considering the size of the company, some analyst make use of S&P 500 as the proxy of market portfolio. Calculate the stock beta of Microsoft. 6. The following table presents the realized annual return for S&P 500 and Microsoft from the beginning of 1996 to the end of 2003. Year end S&P 500 Microsoft 1996 21.2% 88.3% 1997 30.3% 56.4% 1998 22.3% 114.6% 1999 25.3% 68.4% 2000 -11.0% -62.8% 2001 -11.3% 52.7% 2002 -20.8% -22.0% 2003 33.1% 6.9% (a) [2 points) Calculate the average annual returns for S&P 500 and Microsoft. (b) [3 points) Calculate the average annual realized returns for S&P 500 and Mi- crosoft. (c) [4 points) Estimate the volatilities of the return for S&P 500 and Microsoft. (d) [5 points) Estimate the covariance and correlation between S&P 500 and Mi- crosoft. (e) [2 points) Originally, Microsoft is listed in Nasdaq. However, considering the size of the company, some analyst make use of S&P 500 as the proxy of market portfolio. Calculate the stock beta of Microsoft