Choose one publicly traded stock and estimate its required rate of return according to CAPM. (Hint, from yahoo.com/finance, find its beta, and find 10 year Treasury note rate the day you are estimating the return (Current Risk-free rate); for (Rm Rf), use the historical average presented in the image below. For R_m use large company stock, and for R_f use long term government bond.

1. Use the same company in 1 and download 5 years of monthly data. Estimate the stand-alone risk of this company. (Hint: Estimate monthly return and then estimate Standard Deviation of the monthly returns).

SeriesArithmeticMean(%)16.2StandardDeviation(%)31.3 Large-company stocks 12.2 19.7 Long-term corporate bonds 6.5 8.5 Long-term government bonds 6.1 9.8 Intermediate-term government bonds 5.3 5.6 SeriesArithmeticMean(%)16.2StandardDeviation(%)31.3 Large-company stocks 12.2 19.7 Long-term corporate bonds 6.5 8.5 Long-term government bonds 6.1 9.8 Intermediate-term government bonds 5.3 5.6