How to solve it

You are considering two securities, Stock D and Stock , and the relevant information is given as below: Stock D Stock E KLCI Closing Closing Date price Date price Div date closing price 1/1/13 0.51 1/1/13 1.67 1/2/13 532.43 12/31/13 1.42 12/31/13 2.18 12/3 1/13 793.94 1/1/14 1.42 1/1/14 2.18 1/2/14 788.49 12/31/14 0.94 12/31/14 1.99 12/31/14 907.43 1/3/15 0.87 1/3/15 2 1/3/15 903.84 12/30/15 0.37 12/30/15 1.85 12/30/15 899.79 1/2/16 0.37 1/2/16 1.85 1/3/16 892.85 12/29/16 0.28 12/29/16 1.65 12/29/16 1096.24 1/1/17 0.28 1/3/17 1.7 1/3/17 1117.09 LITERZI 0.12 12/31/17 1.38 12/31/17 1445.03 6/16/13 0.11 12/21/14 0.12 12/6/15 0.13 12/14/16 0.14 12/4/17 0.15 1) You plan to buy 100,000 shares from both companies. The current market price for Stock D and Stock E are $0.12 and $1.38 respectively. Calculate the average annual return and standard deviation for Portfolio P, assuming that the correlation between the stocks is 0.46. (19 marks) Assume that the Treasury bill rate is 7%. Stock D has a beta of 0.50, whereas Stock E has a beta of 1.10. i) Based on CAPM. what is the required return of each stock and the portfolio? (2 marks) ii) Which stock is undervalued? Which stock is overvalued? (2 marks) ii) Is the portfolio undervalued or overvalued? (2 marks)