Year	MSFT	IBM	S&P500 index
2003	13.75%	4.74%	4.36%
2004	8.16%	2.53%	4.06%
2005	1.62%	6.06%	3.13%
2006	-0.74%	-0.75%	-0.75%
2007	-8.20%	-6.44%	-6.27%
2008	4.80%	1.39%	3.96%
2009	3.66%	0.20%	1.26%
2010	5.26%	-0.14%	1.98%
2011	3.44%	6.47%	2.42%
2012	-0.10%	-1.23%	-1.98%
2013	6.94%	-1.86%	0.28%
2014	0.36%	0.78%	0.71%
2015	2.77%	6.01%	5.04%
2016	2.11%	-0.68%	1.11%
2017	2.90%	6.21%	3.60%
2018	15.71%	6.04%	1.81%
2019	6.13%	3.17%	2.08%
2020	-1.02%	-8.13%	-1.50%

Assume that you are given the annual returns data above:

a) Using CAPM, calculate MFSTs and IBMs required returns. Assume RPM= 2% and Rf=0.5%. Based on CAPM results, which asset has the lowest cost of equity (Re)?

b) Calculate the stocks risk premiums for MSFT and IBM.

c) Assume you are in a job interview and they ask you What are the main factors that affect a stocks beta estimation?. State two factors that affect a stocks beta estimation. (1-2 sentences, you do not need to provide any calculations or numerical answers).