Jerry recently inherited $100,000 in cash from his grandfather. Jerry considers investing that money in some stocks. After some research, he decides to invest his money on Wal-Mart Stores, Inc (NYSE: WMT) and McDonald's Corp. (NYSE:MCD). Jerry recalls that the investment risk could be minimized if his money is appropirately allocated into the two stocks based on the portfolio theory o. So, he would like to find the minimum variance portfolio (MVP) that could minimize the investment risk. He collects historical monthly prices of the two stocks for roughly three years (i.e., between June 2013 and June 2016 ) from yahoo finance web site to obtain average monthly holding period returns, their standard deviations, covariance, and correlation.

1. Please review the spreadsheet, named "Example for IV" How much of money should be invested in each stock to minimize the portfolio risk (i.e., MVP)? . Also, you have to conduct all calculations on this excel spreadsheet so I can figure out how all numbers are obtained.

Specifically, you need to do the followings for each stock:

Data Import, Monthly return (HPR), Arithmetic average returns and Geometric average return , Stanrdard deviation , Weight (%) for Minimum Variance Portfolio. Also, find Correlation and Covariance between WMT and MCD.

		MRO			CTB
	MARATHON OIL CORP			COOPER TIRE RUBBER
		Holding Period Returns (HPR)	Return Relative		Holding Period Returns (HPR)	Return Relative
1/2/02	5.712674			10.693571
2/1/02	5.647742	-0.011366306	0.988633694	13.324789	0.246056065	1.246056065
3/1/02	5.91473	0.047273406	1.047273406	15.087954	0.13232217	1.13232217
4/1/02	5.968123	0.009027124	1.009027124	17.283197	0.145496401	1.145496401
5/1/02	5.676591	-0.048848189	0.951151811	15.991105	-0.074760011	0.925239989
6/3/02	5.614481	-0.010941426	0.989058574	14.387794	-0.100262677	0.899737323
7/1/02	5.018253	-0.106194678	0.893805322	14.009721	-0.026277343	0.973722657
8/1/02	5.17066	0.030370529	1.030370529	14.618838	0.043478168	1.043478168
9/3/02	4.738203	-0.083636712	0.916363288	11.357306	-0.223104737	0.776895263
10/1/02	4.366337	-0.078482496	0.921517504	9.154806	-0.193928032	0.806071968
11/1/02	4.229511	-0.031336564	0.968663436	11.267509	0.230775289	1.230775289
12/2/02	4.502313	0.064499655	1.064499655	10.870667	-0.03522003	0.96477997
1/2/03	4.419842	-0.018317474	0.981682526	10.133672	-0.067796668	0.932203332
2/3/03	4.935574	0.116685619	1.116685619	10.002123	-0.012981375	0.987018625
3/3/03	5.123677	0.038111677	1.038111677	8.709914	-0.129193472	0.870806528
4/1/03	4.867173	-0.050062484	0.949937516	10.052097	0.154098307	1.154098307
5/1/03	5.551623	0.14062578	1.14062578	11.421831	0.136263508	1.136263508
6/2/03	5.6854	0.024096917	1.024096917	12.643802	0.106985561	1.106985561
7/1/03	5.553786	-0.023149471	0.976850529	12.219706	-0.03354181	0.96645819
8/1/03	6.073145	0.093514406	1.093514406	13.015548	0.065127753	1.065127753
9/2/03	6.20598	0.021872522	1.021872522	11.475375	-0.11833332	0.88166668
10/1/03	6.438971	0.037542983	1.037542983	14.215871	0.238815376	1.238815376
11/3/03	6.502154	0.009812593	1.009812593	14.544441	0.0231129	1.0231129
12/1/03	7.266339	0.117527976	1.117527976	15.540236	0.068465677	1.068465677
1/2/04	7.132389	-0.018434317	0.981565683	14.733424	-0.051917616	0.948082384
2/2/04	7.774738	0.090060848	1.090060848	14.50083	-0.015786826	0.984213174
3/1/04	7.449498	-0.041832921	0.958167079	14.723499	0.015355604	1.015355604
4/1/04	7.425159	-0.0032672	0.9967328	15.62956	0.061538429	1.061538429
5/3/04	7.431791	0.00089318	1.00089318	15.410353	-0.014025155	0.985974845
6/1/04	8.434886	0.134973521	1.134973521	16.888845	0.095941475	1.095941475
7/1/04	8.396994	-0.004492295	0.995507705	17.21928	0.019565281	1.019565281
8/2/04	8.142817	-0.030269999	0.969730001	16.624498	-0.03454163	0.96545837
9/1/04	9.267588	0.138130453	1.138130453	14.879793	-0.104947831	0.895052169
10/1/04	8.555907	-0.076792473	0.923207527	14.370767	-0.034209212	0.965790788
11/1/04	8.919862	0.042538447	1.042538447	15.064223	0.048254627	1.048254627
12/1/04	8.505981	-0.046399933	0.953600067	15.980015	0.060792515	1.060792515
1/3/05	8.759284	0.029779399	1.029779399	16.024508	0.00278429	1.00278429
2/1/05	10.777231	0.230378077	1.230378077	14.348645	-0.104581245	0.895418755
3/1/05	10.68162	-0.008871574	0.991128426	13.689314	-0.04595075	0.95404925
4/1/05	10.601938	-0.00745973	0.99254027	13.010813	-0.049564281	0.950435719
5/2/05	11.107633	0.047698355	1.047698355	14.196325	0.091117442	1.091117442
6/1/05	12.225497	0.100639263	1.100639263	13.922669	-0.019276538	0.980723462
7/1/05	13.368563	0.09349853	1.09349853	15.084767	0.083468048	1.083468048
8/1/05	14.8086	0.107718159	1.107718159	12.750055	-0.154772825	0.845227175
9/1/05	15.872439	0.071839269	1.071839269	11.520316	-0.096449702	0.903550298
10/3/05	13.852983	-0.127230352	0.872769648	10.305666	-0.105435476	0.894564524
11/1/05	13.731797	-0.008748008	0.991251992	11.176804	0.084530005	1.084530005
12/1/05	14.120891	0.028335257	1.028335257	11.640287	0.041468295	1.041468295
1/3/06	17.803398	0.260784323	1.260784323	11.38955	-0.021540448	0.978459552
2/1/06	16.431641	-0.077050291	0.922949709	11.321167	-0.006004012	0.993995988
3/1/06	17.728016	0.078895042	1.078895042	10.973001	-0.030753543	0.969246457
4/3/06	18.470469	0.041880208	1.041880208	9.718069	-0.114365432	0.885634568
5/1/06	17.556967	-0.049457434	0.950542566	8.788596	-0.095643795	0.904356205
6/1/06	19.486954	0.10992713	1.10992713	8.603249	-0.021089489	0.978910511
7/3/06	21.204046	0.088114951	1.088114951	7.715121	-0.103231698	0.896768302
8/1/06	19.621572	-0.074630757	0.925369243	7.679976	-0.00455534	0.99544466
9/1/06	18.070644	-0.079041985	0.920958015	7.859671	0.02339786	1.02339786
10/2/06	20.303045	0.123537435	1.123537435	8.383127	0.066600243	1.066600243
11/1/06	22.278044	0.097276	1.097276	10.419016	0.24285556	1.24285556
12/1/06	21.834284	-0.019919163	0.980080837	11.261673	0.080876831	1.080876831
Reuturn | Arithmetic Average		0.025959742			0.006194938
Reuturn | Geometric Average			0.022985512			0.000877715
Risk | Standard deviation		0.078929815			0.104130446
		Covariance					0.000774894
		Correlation					0.0942808