Q1. Please download and refer to the last one-year stock prices of HDFC bank, Infosys, and NIFTY and answer the following questions:

1. Calculate the annualized stock returns and standard deviations of HDFC bank, Infosys, and NIFTY using the daily returns series. (3 marks)
2. Which stock is riskier amongst HDFC bank and Infosys? Why? (2 marks)
3. Estimate the systematic risk of HDFC bank and Infosys using NIFTY data and explain which stock has higher systematic risk? (use regression method and submit the excel file). (5 marks)
4. Which stock provides a higher reward to risk (sharpe) ratio? Assume a risk-free rate of 7%. Is the sharpe ratio of two stocks higher or lower than NIFTY? Explain. (2 marks)
5. Use Capital Asset Pricing Model (CAPM) to estimate the expected return of HDFC bank and Infosys. Which stock generated higher than expected return during the mentioned time period? (3 marks)
6. Create a portfolio using HDFC bank and Infosys with weights of 40% and 60% respectively. What is the portfolio return and standard deviation? (3 marks)
7. In what proportion can we combine the two stocks to achieve maximum sharpe ratio? Calculate the portfolio return and risk in that scenario? (Hint: Use solver to maximize the sharpe ratio of the portfolio and submit the excel file) (7 marks)