Part 2: Calculate Portfolio Expected Return and Historical Volatility Suppose you invest half of your wealth in MSFT and the other half in KO. 1. Assuming that CAPM holds, what is the annual expected return on your portfolio? Based on the five-year period spanning October 2012 through October 2017... 2. What is the annualized historical volatility of your portfolio returns? 3. What is the annualized average return? 4. What is the realized return on your investment if you purchased this portfolio on the first trading day of October 2012 and sold it on the last trading day of October 2017? Part 3: Calculate Betas Try estimating beta yourself (for both MSFT and KO) using the five-year time series of monthly stock returns from October 2012 through October 2017 (inclusive). Recall that a stock's beta is calculated as: the covariance between its excess returns and excess market returns (for simplicity, you can just use S&P 500 index returns), divided by the variance of excess market returns-i.e., Cov(rm,n)/var(rm). ('excess return' refers to the return in excess of the riskless rate)