7.1.2 - Historical Risk and Return - Walmart What is the standard deviation of Walmart's stock returns over the 5 months in 2020? Answer in % terms w/o % sign and to 4 decimal places (1.2345) 7.2.1 - Historical Risk and Return of a Portfolio What is the standard deviation of a portfolio with 40% allocated to Walmart and 60% allocated to Amazon over the 5 months in 2020? Answer in % terms w/o % sign and to 4 decimal places (1.2345) 7.3.2 - Walmart and Amazon Betas 1) What is the expected return for Walmart stock ( open the "Walmart Beta" chart) when the risk-free rate is 7% and the expected return on the market is 9.92%? Answer in % terms w/o % sign and to 2 decimal places (1.23)

2) What is the beta for a 2 stock portfolio with a 0.41 weight in Walmart stock and the remainder in Amazon? Walmart Standard Deviation Walmart Return Dist. data Walmart Return Dist. Chart

Portfolio Walmart Beta Amazon Beta Portfolio Beta

. B 1 Walmart 2 Mean Standard Deviation 3 -1.20503 6.3381 4 5 SD Inc Data Normalize 6 -3 -20.2193 0.0007 7 -2.9 -19.5855 0.00094 8 -2.8 -18.9517 0.00125 9 -2.7 -18.3179 0.00164 10 -2.6 -17.6841 0.00214 11 -2.5 -17.0503 0.00277 12 -2.4 -16.4165 0.00353 13 -2.3 -15.7827 0.00447 14 -2.2 -15.1488 0.0056 15 -2.1 -14.515 0.00694 16 -2 -13.8812 0.00852 17 -1.9 -13.2474 0.01035 18 -1.8 -12.6136 0.01246 19 -1.7 -11.9798 0.01484 20 -1.6 -11.346 0.0175 21 -1.5 -10.7122 0.02043 22 -1.4 -10.0784 0.02362 23 -1.3 -9.44456 0.02704 24 -1.2 -8.81075 0.03064 25 -1.1 -8.17694 0.03437 26 -1 -7.54313 0.03818 27 -0.9 -6.90932 0.04198 28 -0.8 -6.27551 0.04571 29 -0.7 -5.6417 0.04927 30 -0.6 -5.00789 0.05257 31 -0.5 -4.37408 0.05555 32 -0.4 -3.74027 0.0581 33 -0.3 -3.10646 0.06017 34 -0.2 -2.47265 0.0617 35 -0.1 -1.83884 0.06263 36 0 -1.20503 0.06294 37 0.1 -0.57122 0.06263 38 0.2 0.06259 0.0617 39 0.3 0.6964 0.06017 40 0.4 1.33021 0.0581 41 0.5 1.96402 0.05555 42 0.6 2.59782 0.05257 43 44 45 46 47 48 49 50 51 52 53 54 0.73.23163 0.04927 0.8 3.86544 0.04571 0.9 4.49925 0.04198 15.13306 0.03818 1.1 5.766870.03437 1.2 6.40068 0.03064 1.37.03449 0.02704 1.4 7.6683 0.02362 1.5 8.30211 0.02043 1.6 8.93592 0.0175 1.79.56973 0.01484 1.8 10.2035 0.01246 1.9 10.8374 0.01035 2 11.4712 0.00852 2.1 12.105 0.00694 2.2 12.7388 0.0056 2.3 13.3726 0.00447 2.4 14.0064 0.00353 2.5 14.6402 0.00277 2.6 15.274 0.00214 2.7 15.9078 0.00164 2.8 16.5416 0.00125 2.9 17.1754 0.00094 3 17.8093 0.0007 55 56 57 58 59 60 61 62 63 64 65 66 E A B C D 1 Portfolio Weights 2 Walmart 0.5 3 Amazon 0.5 4 total 1 5 Date WMT AMZN Portfolio 7 2/26/2010 1.1978 -5.5897 -2.1960 8 3/31/2010 3.4097 14.6706 9.0402 9 4/30/2010 -3.5252 0.9796 -1.2728 127 2/28/2020 -5.9481 -6.2214 -6.0848 128 3/31/2020 5.9934 3.5021 4.7478 129 4/30/2020 6.9794 26.8900 16.9347 130 5/29/2020 2.5172 -1.2785 0.6194 131 Avg. Retun 0.9958 2.6786 1.8372 132 Std Dev 4.7762 8.3346 5.1081 133 Coefficient of Variation 4.7962 3.1115 2.7804 134 Covariance 6.0476 135 Correlation 0.1519 1.8372 6.5554 Walmart 30 y = 0.3616x + 0.6128 R2 = 0.0905 20 Walmart's Beta is 0.3616 Slope is 0.3616 10 / Walmart Monthly Returns -10 10 15 -10 -20 -30 S&P 500 Monthly Returns Amazon y = 1.1634x + 1.4463 R2 = 0.3077 30 20 10 Amazon Monthly Returns 0 -10 -5 10 15 -100 -20 -30 S&P 500 Monthly Returns 2 Stock Portfolio 30 Note: 5 x Walmart Beta +.5 x Amazon Beta = .5 x 0.3616 +.5 x 1.1634 = 0.7625 y = 0.7625x + 1.0296 R2 = 0.3519 20 10 8 . Portfolio Monthly Returns -10 10 15 -10 -20 -30 S&P 500 Monthly Return . B 1 Walmart 2 Mean Standard Deviation 3 -1.20503 6.3381 4 5 SD Inc Data Normalize 6 -3 -20.2193 0.0007 7 -2.9 -19.5855 0.00094 8 -2.8 -18.9517 0.00125 9 -2.7 -18.3179 0.00164 10 -2.6 -17.6841 0.00214 11 -2.5 -17.0503 0.00277 12 -2.4 -16.4165 0.00353 13 -2.3 -15.7827 0.00447 14 -2.2 -15.1488 0.0056 15 -2.1 -14.515 0.00694 16 -2 -13.8812 0.00852 17 -1.9 -13.2474 0.01035 18 -1.8 -12.6136 0.01246 19 -1.7 -11.9798 0.01484 20 -1.6 -11.346 0.0175 21 -1.5 -10.7122 0.02043 22 -1.4 -10.0784 0.02362 23 -1.3 -9.44456 0.02704 24 -1.2 -8.81075 0.03064 25 -1.1 -8.17694 0.03437 26 -1 -7.54313 0.03818 27 -0.9 -6.90932 0.04198 28 -0.8 -6.27551 0.04571 29 -0.7 -5.6417 0.04927 30 -0.6 -5.00789 0.05257 31 -0.5 -4.37408 0.05555 32 -0.4 -3.74027 0.0581 33 -0.3 -3.10646 0.06017 34 -0.2 -2.47265 0.0617 35 -0.1 -1.83884 0.06263 36 0 -1.20503 0.06294 37 0.1 -0.57122 0.06263 38 0.2 0.06259 0.0617 39 0.3 0.6964 0.06017 40 0.4 1.33021 0.0581 41 0.5 1.96402 0.05555 42 0.6 2.59782 0.05257 43 44 45 46 47 48 49 50 51 52 53 54 0.73.23163 0.04927 0.8 3.86544 0.04571 0.9 4.49925 0.04198 15.13306 0.03818 1.1 5.766870.03437 1.2 6.40068 0.03064 1.37.03449 0.02704 1.4 7.6683 0.02362 1.5 8.30211 0.02043 1.6 8.93592 0.0175 1.79.56973 0.01484 1.8 10.2035 0.01246 1.9 10.8374 0.01035 2 11.4712 0.00852 2.1 12.105 0.00694 2.2 12.7388 0.0056 2.3 13.3726 0.00447 2.4 14.0064 0.00353 2.5 14.6402 0.00277 2.6 15.274 0.00214 2.7 15.9078 0.00164 2.8 16.5416 0.00125 2.9 17.1754 0.00094 3 17.8093 0.0007 55 56 57 58 59 60 61 62 63 64 65 66 E A B C D 1 Portfolio Weights 2 Walmart 0.5 3 Amazon 0.5 4 total 1 5 Date WMT AMZN Portfolio 7 2/26/2010 1.1978 -5.5897 -2.1960 8 3/31/2010 3.4097 14.6706 9.0402 9 4/30/2010 -3.5252 0.9796 -1.2728 127 2/28/2020 -5.9481 -6.2214 -6.0848 128 3/31/2020 5.9934 3.5021 4.7478 129 4/30/2020 6.9794 26.8900 16.9347 130 5/29/2020 2.5172 -1.2785 0.6194 131 Avg. Retun 0.9958 2.6786 1.8372 132 Std Dev 4.7762 8.3346 5.1081 133 Coefficient of Variation 4.7962 3.1115 2.7804 134 Covariance 6.0476 135 Correlation 0.1519 1.8372 6.5554 Walmart 30 y = 0.3616x + 0.6128 R2 = 0.0905 20 Walmart's Beta is 0.3616 Slope is 0.3616 10 / Walmart Monthly Returns -10 10 15 -10 -20 -30 S&P 500 Monthly Returns Amazon y = 1.1634x + 1.4463 R2 = 0.3077 30 20 10 Amazon Monthly Returns 0 -10 -5 10 15 -100 -20 -30 S&P 500 Monthly Returns 2 Stock Portfolio 30 Note: 5 x Walmart Beta +.5 x Amazon Beta = .5 x 0.3616 +.5 x 1.1634 = 0.7625 y = 0.7625x + 1.0296 R2 = 0.3519 20 10 8 . Portfolio Monthly Returns -10 10 15 -10 -20 -30 S&P 500 Monthly Return