Q4a. Compute excess returns for the market, i.e. market risk premium as R = Rm – Rrf,where Rm is the return on the All Ords computed in question 3, and

Rrf represents the monthly return on the 30 day bank accepted bill rate. Also compute excess return for each wow and ANZ as follows Rwow = Rwow – Rrf and RåNZ = RANZ - Rrf. Use the 01/11/2010 -01/09/2020 time period. : Q4b. Obtain CAPM betas for both WOW and ANZ using excess returns by estimating the following regressions \begin{array}{c} R_{W O W}^{e}=\alpha_{W O W}+\beta_{W O W} R_{m}^{e}+u_{W O W} \\ R_{A N Z}^{e}=\alpha_{A N Z}+\beta_{A N Z} R_{m}^{e}+u_{A N Z} \end{array} where (u wow) and (u ANZ) are the random error terms of the regression models. Q4c. Present and comment on the two beta coefficients estimated in question 4b. What do they imply about the amounts of systematic risk? Note: provide final answer in 4 decimal places Q4d. Compute the expected returns for WOW and ANZ using the CAPM, i.e. \begin{aligned} E\left(R_{\text {IWOW }}\right) &=R_{r f}+\beta_{\text {Wow }}\left(E\left(R_{m}\right)-R_{r f}\right) \\ E\left(R_{A N Z}\right) &=R_{r f}+\beta_{A N Z}\left(E\left(R_{m}\right)-R_{r f}\right) \end{aligned} Where: • Rrf is the average of the monthly risk free rate computed in question 3 • E(Rm) is the average of the market return computed in question 3 Q4 e. Assume you buy one share of WOW and one share of ANZ on 1/01/2019 and sell the shares on 1/12/2019. Calculate your holding period return for the two shares. State the formula you use in your calculation. Comment and compare your results with part 4d above and state which share is over-valued and under-valued. Note: provide final answer in 4 decimal places