Using Yahoo Finance, calculate monthly expected returns, standard deviations, and correlation coefficients for the 2 stocks, Apple(AAPL) and Tesla(TSLA) based on their historical monthly stock database from 2001/01 to 2019/12. Find the opportunity set, MVP, and efficient frontier of Apple and Tesla. Pick the optimal portfolio composed of the two stocks on an efficient frontier based on a two-stock version Capital Market Line. (This portfolio is a tangent point on Capital Market Line. You can find the point by maximizing Sharp Ratio = risk premium / standard deviation.) Draw the Security Characteristics Line for the two stocks based on the historical monthly stock database, and obtain their betas. Calculate the beta of your optimal portfolio, and set up CAPM for the portfolio. Draw SML (Security Market Line) and obtain expected returns for the individual stocks and your optimal portfolio based on their betas. Compare the historical averages of holding period returns with these estimates from CAPM.

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