How to calculate the return and standard deviation of a portfolio that holds these two stocks in the following weights: 0%-100%; 10%-90%; 20%-80%; 30%-70%; 40%-60%; 50%-50%; 60%-40%; 70%-30%; 80%-20%; 90%-10%, 100%-0%. How must it be plotted on a scatter plot.

1. Which specific combination would deliver the least amount of risk? How should the exact weights be calculated if you use the formula for the minimum variance portfolio (show work by hand),How to calculate its return, standard deviation and Sharpe ratio and mark it by hand on plot printout.

2. How to draw in the CAL (by hand) that gives you the best risk-return combinations, given that the monthly risk free rate is 0.15%. Mark the optimal risky portfolio. Calculate the optimal risky portfolio's weights (show your work by hand) in the two stocks. For this optimal portfolio, calculate the average return, standard deviation, and Sharpe ratio (show your work). Mark the ORP on the plot printout by hand.

3. Mark the spot on your return / standard deviation plot where the market index (i.e. S&P 500) falls.

4. For a moment, assume the correlation between the two stocks equals exactly 1. Graph the investment opportunity set. (Hint: This does not require any additional excel work or calculations)

5. If the correlation between the two stocks equals exactly -1.

See data below for stock 1,2 and 3

STOCK 1

166.33

164.49

175.44

166.59

171.10

157.93

161.17

150.62

153.79

148.83

149.22

156.61

147.52

154.61

161.60

164.94

154.78

153.07

161.85

162.38

161.24

139.64

137.75

137.21

131.11

138.50

138.23

147.52

146.11

142.23

141.65

129.32

127.82

123.51

122.92

122.48

111.06

116.61

136.16

131.21

138.22

139.10

147.20

145.60

146.83

142.06

149.95

154.82

162.78

167.72

163.71

150.69

143.49

146.03

137.33

135.78

139.18

147.79

143.05

148.65

STOCK 2

23.73

24.03

24.94

28.85

30.42

30.32

27.95

29.31

29.42

31.30

33.70

33.32

33.70

34.12

36.78

36.25

36.73

37.68

39.00

41.05

42.15

42.69

43.47

42.50

36.96

40.12

37.47

44.82

43.18

40.95

43.31

40.36

41.32

49.14

50.74

52.14

51.78

47.82

52.28

47.21

50.17

48.78

54.03

54.77

55.25

57.47

57.80

60.01

62.43

61.78

63.98

66.51

67.85

67.35

71.03

73.06

73.17

81.71

82.68

84.45

STOCK 3

1498.11

1514.68

1569.19

1597.57

1630.74

1606.28

1685.73

1632.97

1681.55

1756.54

1805.81

1848.36

1782.59

1859.45

1872.34

1883.95

1923.57

1960.23

1930.67

2003.37

1972.29

2018.05

2067.56

2058.90

1994.99

2104.50

2067.89

2085.51

2107.39

2063.11

2103.84

1972.18

1920.03

2079.36

2080.41

2043.94

1940.24

1932.23

2059.74

2065.30

2096.95

2098.86

2173.60

2170.95

2168.27

2126.15

2198.81

2238.83

2278.87

2363.64

2362.72

2384.20

2411.80

2423.41

2470.30

2471.65

2519.36

2575.26

2584.84

2673.61