Complete the steps below using cell references to given data or previous calculations. In some cases, a

simple cell reference is all you need. To copy$/$paste a formula across a row or down a column, an

absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be

used, the directions will specify the use of that function. Do not type in numerical data into a cell or

function. Instead, make a reference to the cell in which the data is found. Make your computations only

in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance

of the data in your formulas, usually the Given Data section.

Using the spreadsheet below and the fact that Cola Co$.$ and Gas Co$.$ have a correlation of $0\mathrm{.}6083,$ calculate

the volatility $($standard deviation$)$ of a portfolio that is $55\%$ invested in Cola Co$.$ stock and $45\%$ invested in

Gas Co$.$ stock. Calculate the volatility by:

a$.$ Using Eq$.12\mathrm{.}4.$

b$.$ Calculating the monthly returns of the portfolio and computing its volatility directly.

c$.$ How do your results compare? ProDiem $12-12$

Complete the steps below using cell references to given data or previous calculations. In some cases, a

simple cell reference is all you need. To copy$/$paste a formula across a row or down a column, an

absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be

used, the directions will specify the use of that function. Do not type in numerical data into a cell or

function. Instead, make a reference to the cell in which the data is found. Make your computations only

in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance

of the data in your formulas, usually the Given Data section.

Using the spreadsheet below and the fact that Cola Co$.$ and Gas Co$.$ have a correlation of $0\mathrm{.}6083,$ calculate

the volatility $($standard deviation$)$ of a portfolio that is $55\%$ invested in Cola Co$.$ stock and $45\%$ invested in

Gas Co$.$ stock. Calculate the volatility by:

a$.$ Using Eq$.12\mathrm{.}4.$

b$.$ Calculating the monthly returns of the portfolio and computing its volatility directly.

c$.$ How do your results compare?

Date

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Cola Co$.$

$-10\mathrm{.}84\%$

$2\mathrm{.}36\%$

$6\mathrm{.}60\%$

$2\mathrm{.}01\%$

$18\mathrm{.}36\%$

$-1\mathrm{.}22\%$

$2\mathrm{.}25\%$

$-6\mathrm{.}89\%$

Gas Co$.$

$-6\mathrm{.}00\%$

$1\mathrm{.}28\%$

$-1\mathrm{.}86\%$

$-1\mathrm{.}90\%$

$7\mathrm{.}40\%$

$-0\mathrm{.}26\%$

$8\mathrm{.}36\%$

$-2\mathrm{.}46\%$