Market Capitalization Sales Operating Income Net Income Total Liabilities Stockholder's Equity Apple Microsoft 694 834 207 123 71 35 59 16 235 133 107 102 Table 4.1: Financial Statement 4. You are consulting an investor regarding an investment decision between Apple and Mi- crosoft. You are asked to conduct a financial statement analysis. For both companies you observe the following information for 2020 as shown in Table 4.1: Compute the following measures for both companies: a) Operating Margin b) Net Profit Margin c) P/E Ratio d) Debt Equity Ratio e) Market-to-Book Ratio 5. You wish to create a portfolio consisting of the stocks Coil Inc. and Amp Engines. You observe the following information about past returns: Annual Returns 2018 2019 2020 Coil 7.29% 7.39% 14.12% Amp 10.92% 8.69% -6.06% Furthermore, your analysts have provided a preliminary report about the individual stock performance: Coil E[r] 9.60% Volatility (o) 3.91% Amp 4.52% 9.23% You consider investing 89% in stock A and 11% in stock B. a) Compute the covariance and correlation between both stocks! b) Compute the expected return of this portfolio! c) Compute the expected volatility of this portfolio