Pick two stocks, say Apple and Citigroup. Look at their monthly closing prices for last year on Yahoo Finance and: Estimate Beta for each of them. Using the CAPM model, calculate the expected return for each. Assume a market risk premium of 8% and risk free rate of 4%. Calculate the standard deviation for each stock. Explain your workings and comment on your findings.

Answer rating: 100% (QA)

tep 1 Calculate Monthly Returns For each stocksubtract the previous months closing price from the cu... View the full answer