2) Think of three publicly traded (meaning they have stock prices) U.S. rms, which we will call A, B, and C. A & B should be rms in the same industry and ones you expect to be very similar. Firm C should be a company in a completely different industry. As an example, you could choose Coca- Cola, PepsiCo, and Microsoft. Extract the monthly prices and determine the monthly returns of each of these securities over a 60-month period (From Jan 1, 2015-Dec 31, 2019). If you do not know how to do this, please watch the brief tutorial How To Determine Monthly Returns. Enter all of these returns in a single spreadsheet and do the following. a. Determine the mean, variance and standard deviation of each security's returns. b. Determine the covariance and correlations of each pair's returns with one another. Briey discuss each correlation (i.e. does it make sense given the (lack of) similarities?) c. Create two portfolios (AB and AC). Begin with $1,000 to invest and evenly distribute into each investment at the beginning of the rst month. Determine the value of each investment at the end of the rst month, and then evenly divide the total amount into the same to investments at the beginning of the second month. Continue doing this for all 60 months (this is called rebalancing an equally-weighted portfolio). i. Determine the monthly returns of these two portfolios. ii. Speculate which of the two portfolios should have the lower standard deviation and why. iii. Calculate each portfolio's standard deviation and compare to your expectations in (ii). How do the portfolios' standard deviations compare to the standard deviations of the individual securities that comprise the portfolios? Discuss any lessons/ insights