• Risk and return analysis (Use Yahoo Finance):
• Compute the historical average (that represents the expected return) and standard deviation of the 60 monthly observations of stock return.
• Compute its Sharpe ratio. For example, for Microsoft, its Sharpe ratio is the difference between the historical average of MSFT average return and the historical average of SHY return, divided by MSFT standard deviation.
• Conventionally risk and return measures, as well as Sharpe ratios, are annualized. To annualize the risk and return measures, scale expected returns by multiplying by 12, and standard deviations and Sharpe ratios by multiplying by 3.464, i.e., square root of 12.
• Repeat the above procedure and estimate the expected return, the standard deviation, and the Sharpe ratio of the market index (SPY).

Question:

1. Report the expected returns, the standard deviations, and the Sharpe ratios of the stock (e.g., MSFT) and the market index (i.e., SPY).