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Following table list the monthly stock prices for Apple and Amazon from Jan 2020 to Dec 202 Date Apple Amazon SP500(Market Index) 1/1/2021 131.1515 3206.2

  1. Following table list the monthly stock prices for Apple and Amazon from Jan 2020 to Dec 202

Date

Apple

Amazon

SP500(Market Index)

1/1/2021

131.1515

3206.2

3714.24

2/1/2021

120.517

3092.93

3811.15

3/1/2021

121.583

3094.08

3972.89

4/1/2021

130.8498

3467.42

4181.17

5/1/2021

124.0316

3223.07

4204.11

6/1/2021

136.5558

3440.16

4297.5

7/1/2021

145.4295

3327.59

4395.26

8/1/2021

151.3819

3470.79

4522.68

9/1/2021

141.2938

3285.04

4307.54

10/1/2021

149.5817

3372.43

4605.38

11/1/2021

165.0591

3507.07

4567

12/1/2021

179.45

3381.83

4701.21

Estimate the following: [09, 3 point each]

  1. Portfolio Return and risk of a portfolio composed, in equal parts of Apple and Amazon.
  2. Beta of each. Comment on riskiness of each.
  3. Given the monthly T-bill rate of 0.03% and Risk premium of 4.87% for Apple and Amazon, Calculate Expected return for Apple and Amazon using CAPM. (Hint: Use the beta calculated in step b to find expected return).

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