(Click on the following icon in order to copy its contents into a spreadsheet.) S&P 500 WALMART TARGET $1,631 1,606 1,686 1,633 1,682 1,757 1,806 1,848 $74.84 74.49 77.94 72.98 73.96 76.75 81.01 78.69 $69.50 68.86 71.25 63.31 63.98 64.79 63.93 63.27 MONTH 2013 May June July August September October November December 2014 January February March April May June July August September October November December 2015 January February March April May 1,783 1,859 1,872 1,884 1,924 1,960 1,931 2,003 1,972 2,018 2,068 2,059 74.68 74.70 76.43 79.71 76.77 75.07 73.58 75.50 76.47 76.27 87.54 85.88 56.64 62.54 60.51 61.75 56.76 57.95 59.59 60.07 62.68 61.82 74.00 75.91 1,995 2,105 2,068 2,086 2,128 84.98 83.93 82.25 78.05 75.86 73.61 76.83 82.07 78.83 79.29 MONTH AND YEAR Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 ANNUALIZED RATE OF RETURN 2.30% 2.58% 2.74% 2.81% 2.62% 2.72% 2.90% 2.86% 2.71% 2.72% 2.71% 2.56% 2.60% 2.54% 2.42% 2.53% 2.30% 2.33% 2.21% 1.88% 1.98% 2.04% 1.94% 1.97% Feb-15 Mar-15 Apr-15 May-15 a. Use the price data from the table in the popup window. 3. for the Standard & Poor's 500 Index, Walmart, and Target to calculate the holding-period retums for the 24 months from May 2013 through May 2015. b. Calculate the average monthly holding period returns and the standard deviation of these returns for the S&P 500 Index, Walmart, and Target. c. From the following graphs, describe the nature of the relationship between the stock returns for Walmart and the returns for the S&P 500 Index. d. Assure that you have decided to invest one-half of your money in Walmart and the remainder in Target. Calculate the monthly holding-period returris for your two-stock portfolio. (Hint: The monthly return for the portfolio is the average of the two stocks' monthly retums.) e. The table in the popup window shows the returns on an annualized basis that were realized from holding long-term government bonds for the same period. Calculate the average monthly holding-period retums and the standard deviations of these returns. (Hint: You will need to convert the annual returns to monthly returns by dividing each return by 12 months.) f. Now assuming that you have decided to invest equal amounts of money in Walmart, Target, and long-term govemment securities, calculate the monthly returns for your three-asset portfolio. What are the average return and the standard deviation? g. Make a comparison of the average returris and the standard deviations for all the individual assets and the two portfolios that we designed. What conclusions can be reached by your comparison? h. According to Standard & Poor's, the betas for Walmart and Target are 0.28 and 0.75, respectively. Compare the meaning of these betas relative to the standard deviations calculated above. i. Assume that the current Treasury bill rate is 3 percent and that the expected market return is 10 percent. Given the betas for Walmart and Target in parth, estimate an appropriate rate of return for the two firms. a. Calculate the monthly holding-period returns (HPR) for the Standard & Poor's 500 Index for the 24 months from May 2013 through May 2015 in the following table. Enter a negative number if the holding-period return is negative. (Round to two decimal places.) HPR MONTH May-13 S&P 500 $1,631 $1.606 Jun-13 % Jul-13 $1.686 $1,633 Aug.13 Sep 13 Oct-13 $1,682 $1,757 $1.806 % % % % % % Nov-13 Dec-13 Jan-14 $1.848 $1.783 % Feb-14 $1,859 % Mar-14 % $1,872 $1,884 Apr-14 % May-14 $1,924 % Jun-14 $1,960 % Jul-14 $1,931 % Aug-14 $2,003 % Sep-14 $1,972 % Oct-14 $2,018 % Nov-14 $2,068 % Dec-14 $2,059 % Jan-15 $1,995 % Feb-15 $2,105 % Mar-15 $2,068 % Apr-15 $2,086 % May-15 $2,128 % Calculate the holding-period returns (HPR) for Walmart for the 24 months from May 2013 through May 2015 in the following table. Enter a negative number if the holding-period return is negative. (Round to two decimal places.) MONTH WALMART HPR May-13 $74.84 Jun-13 $74.49 % Jul-13 $77.94 % Aug-13 $72.98 Sep-13 $73.96 % Oct-13 $76.75 % Nov-13 $81.01 % Dec-13 $78.69 % Jan-14 $74.68 Feb-14 $74.70 Mar-14 $76.43 % Apr-14 $79.71 % $76.77 % May-14 Jun-14 $75.07 % Jun-14 $75.07 % Jul-14 $73.58 Aug-14 $75.50 % Sep-14 $76.47 % Oct-14 $76.27 % Nov-14 $87.54 % Dec-14 $85.88 % Jan-15 $84.98 % Feb-15 $83.93 % Mar-15 $82.25 % Apr-15 $78.05 % May-15 $75.86 % Calculate the holding-period returns (HPR) for Target for the 24 months from May 2013 through May 2015 in the following table. Enter a negative number if the holding-period return is negative. (Round to two decimal places.) MONTH TARGET HPR May-13 $69.50 Jun-13 $68.86 % Jul-13 $71.25 % |Aug-13 $63.31 % Sep-13 $63.98 % Oct-13 $64.79 % Nov-13 $63.93 % Dec-13 $63.27 % Jan-14 $56.64 % Feb-14 $62.54 % Mar-14 $60.51 % Apr-14 $61.75 % May-14 $56.76 % Jun-14 $57.95 % Jul-14 $59.59 % $60.07 % Aug-14 Sep-14 $62.68 % Oct-14 $61.82 % INov-14 $74.00 % Dec-14 $75.91 % Jan-15 $73.61 % Feb-15 $76.83 % Mar-15 $82.07 % Apr-15 $78.83 % May-15 $79.29 % b. What is the average monthly holding-period return for the S&P 500 Index? Enter a negative number if the average return is negative. % (Round to two decimal places.) What is the standard deviation of the monthly returns for the S&P 500 Index? What is the standard deviation of the monthly returns for the S&P 500 Index? % (Round to two decimal places.) What is the average monthly holding-period returns for Walmart? Enter a negative number if the average return is negative. % (Round to two decimal places.) What is the standard deviation of the monthly returns for Walmart? % (Round to two decimal places.) What is the average monthly holding-period returns for Target? Enter a negative number if the average return is negative. % (Round to two decimal places.) What is the standard deviation of the monthly returns for Target? % (Round to two decimal places.) c. From the graph below, which of the following statements best describes the nature of the relationship between the stock returns for Walmart (y-axis) and the returns for the S&P 500 Index (x-axis)? (Select the best choice below.) c. From the graph below, which of the following statements best describes the nature of the relationship between the stock returns for Walmart (y-axis) and the returns for the S&P 500 Index (x-axis)? (Select the best choice below.) 25- 20- 15- o 10- o 5- o oo O O -20 -15 -10 o ob 50 10 15 20 80 -510 Walmart O - 10- -15- -20- 25 O LO O O -20 -15 -10 5 on O 50 to 15 20 .80 Walmart -5- o o - 10- -15 -20- -25 S&P 500 A. The two returns are moderately positively related. B. The two returns are perfectly positively related. C. The two returns are perfectly negatively related. OD. The two returns are moderately negatively related. d. Assume that you have decided to invest one-half of your money in Walmart and the remainder in Target. Calculate the monthly holding-period returns for your two-stock portfolio as the average of the two stocks' monthly returns. Enter a negative number if the holding-period return is negative. (Round to two decimal places.) MONTH WALMART HPR TARGET HPR PORTFOLIO HPR Jun-13 -0.47% -0.92% % Jul-13 4.63% 3.47% Aug-13 -6.36% - 11.14% % Sep-13 1.34% 1.06% % Oct-13 3.77% 1.27% % Nov-13 5.55% -1.33% % Dec-13 - 2.86% -1.03% % Jan-14 -5.10% - 10.48% % Feb-14 0.03% 10.42% % Mar-14 2.32% -3.25% % Apr-14 4.29% 2.05% % May-14 -3.69% -8.08% % Jun-14 - 2.21% 2.10% % Jul-14 - 1.98% 2.83% % Aug-14 2.61% 0.81% % Sep-14 1.28% 4.34% % Oct-14 -0.26% -1.37% % Nov-14 14.78% 19.70% % Dec-14 - 1.90% 2.58% % Jan-15 - 1.05% - 3.03% % Feb-15 - 1.24% 4.37% % Mar-15 -2.00% 6.82% Apr-15 -5.11% -3.95% % May-15 -2.81% 0.58% % e. Calculate the average monthly holding-period returns and the standard deviations of these returns for the long-term government bonds. (Round to two decimal places.) MONTH AND YEAR ANNUALIZED RATE OF RETURN MONTHLY RATE OF RETURN Jun-13 2.30% % Jul-13 2.58% % |Aug-13 2.74% % Sep-13 2.81% % Oct-13 2.62% % Nov-13 2.72% % Dec-13 2.90% % Jan-14 2.86% % Feb-14 2.71% % Mar-14 2.72% % Apr-14 2.71% % May-14 2.56% % Jun-14 2.60% % Jul-14 2.54% % Aug-14 2.42% % Sep-14 2.53% Oct-14 2.30% % Nov-14 2.33% % Dec-14 2.21% % Jan-15 1.88% % Feb-15 1.98% % Mar-15 2.04% % Apr-15 1.94% % May-15 1.97% % What is the average monthly return for the long-term government bonds? % (Round to two decimal places.) What is the standard deviation of the monthly returns for the long-term government bonds? 1% (Round to two decimal places) f. Now assuming that you have decided to invest equal amounts of money in Walmart, Target, and long-term government securities, calculate the monthly returns for your three-asset portfolio as the average of the three securities' monthly returns. Enter a negative number if the holding-period return is negative. (Round to two decimal places.) MONTH WALMART HPR TARGET HPR BONDS HPR PORTFOLIO HPR Jun-13 -0.47% -0.92% 0.19% % Jul-13 4.63% 3.47% 0.22% % Aug-13 -6.36% - 11.14% 0.23% % Sep-13 1.34% 1.06% 0.23% % Oct-13 3.77% 1.27% 0.22% % Nov-13 5.55% - 1.33% 0.23% % Dec-13 - 2.86% -1.03% 0.24% % Jan-14 -5.10% - 10.48% 0.24% % Feb-14 0.03% 10.42% 0.23% % Mar-14 2.32% - 3.25% 0.23% % Apr-14 4.29% 2.05% 0.23% % May-14 -3.69% -8.08% 0.21% % Jun-14 -2.21% 2.10% 0.22% % Jul-14 - 1.98% 2.83% 0.21% % Aug-14 2.61% 0.81% 0.20% % Sep-14 1.28% 4.34% 0.21% % Oct-14 -0.26% - 1.37% 0.19% % Nov-14 14.78% 19.70% 0.19% % Dec-14 - 1.90% 2.58% 0.18% % Jan-15 - 1.05% - 3.03% 0.16% % Feb-15 - 1.24% 4.37% 0.17% % Mar-15 -2.00% 6.82% 0.17% % Apr-15 - 5.11% - 3.95% 0.16% % May-15 - 2.81% 0.58% 0.16% % What is the average monthly return for the three-asset portfolio? % (Round to two decimal places.) What is the standard deviation of the monthly returns for the three-asset portfolio? % (Round to two decimal places.) g. From the findings above, which of the following statements is correct? (Select the best choice below.) A. In general, higher average returns are associated with lower standard deviations. Moreover, the portfolio average returns are a proportionate reflection of the average returns of the individual securities, but the standard deviations for the portfolios are not an average of the standard deviations for the individual stocks. B. In general, higher average returns are associated with higher standard deviations. Moreover, the portfolio average returns are a proportionate reflection of the average returns of the individual securities, but the standard deviations for the portfolios are not an average of the standard deviations for the individual stocks. C. In general, higher average returns are associated with higher standard deviations. Moreover, the portfolio average returns are a proportionate reflection of the average returns of the individual securities, and the standard deviations for the portfolios are an average of the standard deviations for the individual stocks. OD. general, higher average returns are associated with lower standard deviations. Moreover, the portfolio average returns are a proportionate reflection the average returns of individual securities, and andard deviations for the portfolios are an average of the standard deviations for the individual stocks. h. Based on the standard deviations, is more risky, and based on the beta, is more risky. (Select from the drop-down menus.) i. Assume that the current Treasury bill rate is 3 percent and that the expected market return is 10 percent. Given the beta for Walmart in part h, what is the appropriate rate of return for Walmart? % (Round to two decimal places.) 1. Assume that the current Treasury bill rate is 3 percent and that the expected market return is 10 percent. Given the beta for Walmart in part h, what is the appropriate rate of return for Walmart? % (Round to two decimal places.) Given the beta for Target in part h, what is the appropriate rate of return for Target? % (Round to two decimal places.) (Click on the following icon in order to copy its contents into a spreadsheet.) S&P 500 WALMART TARGET $1,631 1,606 1,686 1,633 1,682 1,757 1,806 1,848 $74.84 74.49 77.94 72.98 73.96 76.75 81.01 78.69 $69.50 68.86 71.25 63.31 63.98 64.79 63.93 63.27 MONTH 2013 May June July August September October November December 2014 January February March April May June July August September October November December 2015 January February March April May 1,783 1,859 1,872 1,884 1,924 1,960 1,931 2,003 1,972 2,018 2,068 2,059 74.68 74.70 76.43 79.71 76.77 75.07 73.58 75.50 76.47 76.27 87.54 85.88 56.64 62.54 60.51 61.75 56.76 57.95 59.59 60.07 62.68 61.82 74.00 75.91 1,995 2,105 2,068 2,086 2,128 84.98 83.93 82.25 78.05 75.86 73.61 76.83 82.07 78.83 79.29 MONTH AND YEAR Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 ANNUALIZED RATE OF RETURN 2.30% 2.58% 2.74% 2.81% 2.62% 2.72% 2.90% 2.86% 2.71% 2.72% 2.71% 2.56% 2.60% 2.54% 2.42% 2.53% 2.30% 2.33% 2.21% 1.88% 1.98% 2.04% 1.94% 1.97% Feb-15 Mar-15 Apr-15 May-15 a. Use the price data from the table in the popup window. 3. for the Standard & Poor's 500 Index, Walmart, and Target to calculate the holding-period retums for the 24 months from May 2013 through May 2015. b. Calculate the average monthly holding period returns and the standard deviation of these returns for the S&P 500 Index, Walmart, and Target. c. From the following graphs, describe the nature of the relationship between the stock returns for Walmart and the returns for the S&P 500 Index. d. Assure that you have decided to invest one-half of your money in Walmart and the remainder in Target. Calculate the monthly holding-period returris for your two-stock portfolio. (Hint: The monthly return for the portfolio is the average of the two stocks' monthly retums.) e. The table in the popup window shows the returns on an annualized basis that were realized from holding long-term government bonds for the same period. Calculate the average monthly holding-period retums and the standard deviations of these returns. (Hint: You will need to convert the annual returns to monthly returns by dividing each return by 12 months.) f. Now assuming that you have decided to invest equal amounts of money in Walmart, Target, and long-term govemment securities, calculate the monthly returns for your three-asset portfolio. What are the average return and the standard deviation? g. Make a comparison of the average returris and the standard deviations for all the individual assets and the two portfolios that we designed. What conclusions can be reached by your comparison? h. According to Standard & Poor's, the betas for Walmart and Target are 0.28 and 0.75, respectively. Compare the meaning of these betas relative to the standard deviations calculated above. i. Assume that the current Treasury bill rate is 3 percent and that the expected market return is 10 percent. Given the betas for Walmart and Target in parth, estimate an appropriate rate of return for the two firms. a. Calculate the monthly holding-period returns (HPR) for the Standard & Poor's 500 Index for the 24 months from May 2013 through May 2015 in the following table. Enter a negative number if the holding-period return is negative. (Round to two decimal places.) HPR MONTH May-13 S&P 500 $1,631 $1.606 Jun-13 % Jul-13 $1.686 $1,633 Aug.13 Sep 13 Oct-13 $1,682 $1,757 $1.806 % % % % % % Nov-13 Dec-13 Jan-14 $1.848 $1.783 % Feb-14 $1,859 % Mar-14 % $1,872 $1,884 Apr-14 % May-14 $1,924 % Jun-14 $1,960 % Jul-14 $1,931 % Aug-14 $2,003 % Sep-14 $1,972 % Oct-14 $2,018 % Nov-14 $2,068 % Dec-14 $2,059 % Jan-15 $1,995 % Feb-15 $2,105 % Mar-15 $2,068 % Apr-15 $2,086 % May-15 $2,128 % Calculate the holding-period returns (HPR) for Walmart for the 24 months from May 2013 through May 2015 in the following table. Enter a negative number if the holding-period return is negative. (Round to two decimal places.) MONTH WALMART HPR May-13 $74.84 Jun-13 $74.49 % Jul-13 $77.94 % Aug-13 $72.98 Sep-13 $73.96 % Oct-13 $76.75 % Nov-13 $81.01 % Dec-13 $78.69 % Jan-14 $74.68 Feb-14 $74.70 Mar-14 $76.43 % Apr-14 $79.71 % $76.77 % May-14 Jun-14 $75.07 % Jun-14 $75.07 % Jul-14 $73.58 Aug-14 $75.50 % Sep-14 $76.47 % Oct-14 $76.27 % Nov-14 $87.54 % Dec-14 $85.88 % Jan-15 $84.98 % Feb-15 $83.93 % Mar-15 $82.25 % Apr-15 $78.05 % May-15 $75.86 % Calculate the holding-period returns (HPR) for Target for the 24 months from May 2013 through May 2015 in the following table. Enter a negative number if the holding-period return is negative. (Round to two decimal places.) MONTH TARGET HPR May-13 $69.50 Jun-13 $68.86 % Jul-13 $71.25 % |Aug-13 $63.31 % Sep-13 $63.98 % Oct-13 $64.79 % Nov-13 $63.93 % Dec-13 $63.27 % Jan-14 $56.64 % Feb-14 $62.54 % Mar-14 $60.51 % Apr-14 $61.75 % May-14 $56.76 % Jun-14 $57.95 % Jul-14 $59.59 % $60.07 % Aug-14 Sep-14 $62.68 % Oct-14 $61.82 % INov-14 $74.00 % Dec-14 $75.91 % Jan-15 $73.61 % Feb-15 $76.83 % Mar-15 $82.07 % Apr-15 $78.83 % May-15 $79.29 % b. What is the average monthly holding-period return for the S&P 500 Index? Enter a negative number if the average return is negative. % (Round to two decimal places.) What is the standard deviation of the monthly returns for the S&P 500 Index? What is the standard deviation of the monthly returns for the S&P 500 Index? % (Round to two decimal places.) What is the average monthly holding-period returns for Walmart? Enter a negative number if the average return is negative. % (Round to two decimal places.) What is the standard deviation of the monthly returns for Walmart? % (Round to two decimal places.) What is the average monthly holding-period returns for Target? Enter a negative number if the average return is negative. % (Round to two decimal places.) What is the standard deviation of the monthly returns for Target? % (Round to two decimal places.) c. From the graph below, which of the following statements best describes the nature of the relationship between the stock returns for Walmart (y-axis) and the returns for the S&P 500 Index (x-axis)? (Select the best choice below.) c. From the graph below, which of the following statements best describes the nature of the relationship between the stock returns for Walmart (y-axis) and the returns for the S&P 500 Index (x-axis)? (Select the best choice below.) 25- 20- 15- o 10- o 5- o oo O O -20 -15 -10 o ob 50 10 15 20 80 -510 Walmart O - 10- -15- -20- 25 O LO O O -20 -15 -10 5 on O 50 to 15 20 .80 Walmart -5- o o - 10- -15 -20- -25 S&P 500 A. The two returns are moderately positively related. B. The two returns are perfectly positively related. C. The two returns are perfectly negatively related. OD. The two returns are moderately negatively related. d. Assume that you have decided to invest one-half of your money in Walmart and the remainder in Target. Calculate the monthly holding-period returns for your two-stock portfolio as the average of the two stocks' monthly returns. Enter a negative number if the holding-period return is negative. (Round to two decimal places.) MONTH WALMART HPR TARGET HPR PORTFOLIO HPR Jun-13 -0.47% -0.92% % Jul-13 4.63% 3.47% Aug-13 -6.36% - 11.14% % Sep-13 1.34% 1.06% % Oct-13 3.77% 1.27% % Nov-13 5.55% -1.33% % Dec-13 - 2.86% -1.03% % Jan-14 -5.10% - 10.48% % Feb-14 0.03% 10.42% % Mar-14 2.32% -3.25% % Apr-14 4.29% 2.05% % May-14 -3.69% -8.08% % Jun-14 - 2.21% 2.10% % Jul-14 - 1.98% 2.83% % Aug-14 2.61% 0.81% % Sep-14 1.28% 4.34% % Oct-14 -0.26% -1.37% % Nov-14 14.78% 19.70% % Dec-14 - 1.90% 2.58% % Jan-15 - 1.05% - 3.03% % Feb-15 - 1.24% 4.37% % Mar-15 -2.00% 6.82% Apr-15 -5.11% -3.95% % May-15 -2.81% 0.58% % e. Calculate the average monthly holding-period returns and the standard deviations of these returns for the long-term government bonds. (Round to two decimal places.) MONTH AND YEAR ANNUALIZED RATE OF RETURN MONTHLY RATE OF RETURN Jun-13 2.30% % Jul-13 2.58% % |Aug-13 2.74% % Sep-13 2.81% % Oct-13 2.62% % Nov-13 2.72% % Dec-13 2.90% % Jan-14 2.86% % Feb-14 2.71% % Mar-14 2.72% % Apr-14 2.71% % May-14 2.56% % Jun-14 2.60% % Jul-14 2.54% % Aug-14 2.42% % Sep-14 2.53% Oct-14 2.30% % Nov-14 2.33% % Dec-14 2.21% % Jan-15 1.88% % Feb-15 1.98% % Mar-15 2.04% % Apr-15 1.94% % May-15 1.97% % What is the average monthly return for the long-term government bonds? % (Round to two decimal places.) What is the standard deviation of the monthly returns for the long-term government bonds? 1% (Round to two decimal places) f. Now assuming that you have decided to invest equal amounts of money in Walmart, Target, and long-term government securities, calculate the monthly returns for your three-asset portfolio as the average of the three securities' monthly returns. Enter a negative number if the holding-period return is negative. (Round to two decimal places.) MONTH WALMART HPR TARGET HPR BONDS HPR PORTFOLIO HPR Jun-13 -0.47% -0.92% 0.19% % Jul-13 4.63% 3.47% 0.22% % Aug-13 -6.36% - 11.14% 0.23% % Sep-13 1.34% 1.06% 0.23% % Oct-13 3.77% 1.27% 0.22% % Nov-13 5.55% - 1.33% 0.23% % Dec-13 - 2.86% -1.03% 0.24% % Jan-14 -5.10% - 10.48% 0.24% % Feb-14 0.03% 10.42% 0.23% % Mar-14 2.32% - 3.25% 0.23% % Apr-14 4.29% 2.05% 0.23% % May-14 -3.69% -8.08% 0.21% % Jun-14 -2.21% 2.10% 0.22% % Jul-14 - 1.98% 2.83% 0.21% % Aug-14 2.61% 0.81% 0.20% % Sep-14 1.28% 4.34% 0.21% % Oct-14 -0.26% - 1.37% 0.19% % Nov-14 14.78% 19.70% 0.19% % Dec-14 - 1.90% 2.58% 0.18% % Jan-15 - 1.05% - 3.03% 0.16% % Feb-15 - 1.24% 4.37% 0.17% % Mar-15 -2.00% 6.82% 0.17% % Apr-15 - 5.11% - 3.95% 0.16% % May-15 - 2.81% 0.58% 0.16% % What is the average monthly return for the three-asset portfolio? % (Round to two decimal places.) What is the standard deviation of the monthly returns for the three-asset portfolio? % (Round to two decimal places.) g. From the findings above, which of the following statements is correct? (Select the best choice below.) A. In general, higher average returns are associated with lower standard deviations. Moreover, the portfolio average returns are a proportionate reflection of the average returns of the individual securities, but the standard deviations for the portfolios are not an average of the standard deviations for the individual stocks. B. In general, higher average returns are associated with higher standard deviations. Moreover, the portfolio average returns are a proportionate reflection of the average returns of the individual securities, but the standard deviations for the portfolios are not an average of the standard deviations for the individual stocks. C. In general, higher average returns are associated with higher standard deviations. Moreover, the portfolio average returns are a proportionate reflection of the average returns of the individual securities, and the standard deviations for the portfolios are an average of the standard deviations for the individual stocks. OD. general, higher average returns are associated with lower standard deviations. Moreover, the portfolio average returns are a proportionate reflection the average returns of individual securities, and andard deviations for the portfolios are an average of the standard deviations for the individual stocks. h. Based on the standard deviations, is more risky, and based on the beta, is more risky. (Select from the drop-down menus.) i. Assume that the current Treasury bill rate is 3 percent and that the expected market return is 10 percent. Given the beta for Walmart in part h, what is the appropriate rate of return for Walmart? % (Round to two decimal places.) 1. Assume that the current Treasury bill rate is 3 percent and that the expected market return is 10 percent. Given the beta for Walmart in part h, what is the appropriate rate of return for Walmart? % (Round to two decimal places.) Given the beta for Target in part h, what is the appropriate rate of return for Target? % (Round to two decimal places.)
