Compare the factor betas and provide some comparisons between the two funds. $(5$p$)$

Now, use the Eama$-$French $5-$Factor model below to estimate each of these funds' expected returns

$R_{i,t}^e={}_i+{}_{i,M}{R}_{MKT}^e+{}_{i,SMB}SM{B}_t+{}_{i,HML}HM{L}_t+{}_{i,HML}RM{W}_t+{}_{i,HML}CM{A}_t+e_{i,t}$

To simplify notation in the regression notice that $R_{i,t}^e=R_{i,t}-R_{F,t}=$ is stock or portfolio $i^{th}$ excess return and $R_{MKT}^e=R_{Mt}-R_{F,t}=$ is the excess return on a "stock market portfolio"

In order to do this follow the same procedure as before.

$6.$ Step $1.$ Estimate the risk premia for each factor $(5$p$)$

$7.$ Step $2.$ Estimate the sensitivities of the $i^{th}$ stock to each of those factors. $(5$p$)$

$8.$ Step $3.$ The expected returns can be calculated by combining the results of the previous steps. $(5$p$)$

$9.$ Which fund has the highest and lowest expected return? $(5$p$)$

$10.$ Compare the factor betas and provide some comparisons between the two funds. $(5$p$)$

$11.$ Which model is better to calculate the factor betas? $(5$p$)$

Part $4.$ Portfolio

Please download monthly adj. close prices from $\frac{12}{1}\frac{?}{2012}$ to $\frac{12}{1}\frac{?}{2017}$ for the following individuals stocks:

Alphabet Inc. $($GOOG$)$

Boeing $($BA$)$

Costco Wholesale Corporation $($COST$)$

Wells Fargo & Company $($WFC$)$

Tesla, Inc. $($TSLA$)$

Information on these stocks is available on the Yahoo! finance site. After typing in the sticker symbol and retrieving the quote data, choose Profile to get a summary of the stock. Please review each stock before doing any of the analysis below.

Compute monthly returns for each individual stock. $(5$p$)$

Compute univariate descriptive statistics $($mean$,$ standard deviation$)$ for each return series and comment. Arrange these values in a table. $(5$p$)$

a$.$ Which stocks have the highest and lowest average return? $(5$p$)$

b$.$ Which stocks have the highest and lowest standard deviation? $(5$p$)$

Compute the sample covariance matrix of the returns on the five stocks and comment on the direction of linear association between the asset returns. $(5$p$)$

Compute the sample correlation matrix of the returns on the $5$ stocks. $(5$p$)$

a$.$ Which assets are most highly correlated? $(5$p$)$

b$.$ Which are least correlated? $(5$p$)$