You are tasked to analyze stock A and the index S&P500. Following are the monthly prices and dividend distributions over the two assets: Stock A Stock A S&P 500 Month price ($) dividend price ($) 0 $28.22 2,411.80 1 $26.55 2,423.41 2 $28.55 2,470.30 $30.20 $2.5 2,471.65 $31.90 2,519.36 5 $32.12 2,575.26 6 $33.13 2,587.84 3 4 5 1. Calculate the monthly returns of stock A and the S&P 500 index. (1.5) 2. Use the above holding-period returns (from part a) to compute the average returns and the standard deviations for this stock and for the market. (2.5 points) 3. Assume that the beta of stock A is 1.5 and the risk free rate is 4%. Estimate the expected return for an investor owning the stock. (1 point) 4. Compare the historical average return of this stock with the return you should expect based on the CAPM and the firm's systematic risk. (1 point)