1. � (2 point) Calculate the expected return of the following stocks using CAPM. You can use internet websites to get Beta figures, such as Yahoo! Finance, Google Finance, MSN Money, Marketwatch, etc. Use 4% as the risk free rate and 6% as the risk premium. a. �  Proctor & Gamble (PG) b. � Microsoft (MSFT) c. �  Macy’s (M) d. � JP Morgan Chase (JPM) e. �  Southern Company (SO) 2. � (2 points) Look up Microsoft’s financials on the internet. Sites to use include those listed above as well as the SEC’s website “� www.sec.gov. Select two ratios from each of the following categories (8 calculations in total) and show your calculations. Be sure to show the formula and your calculations. No points will be given if work is not shown even if you get the correct answer. Categories: a. �  Profitability ratios b. � Asset-utilization ratios c. �  Liquidity ratios d. � Debt ratios 3. � (1 point) Identify two leading indicators for the economy and two lagging indicators. Discuss 1. what these metrics indicate about the economy and 2. what is the most recent statistic on your selected indicators and what that may mean for our current economy. Example: Retail sales “� leading indicator; shows consumer’s confidence in the economy “� if they are willing to spend more money, they feel more confident about their job situation; currently, retail sales are just under 3% yoy and shows consumers are still willing to spend

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