Johnson & Johnson and Walgreens Boots Alliance have expected retums and volatilities shown below, with a correlation of 22% Calculate the expected retum and the volatility (standard deviation) of a portfolio consisting of Johnson & Johnson's and Walgreens' stocks using a wide range of portfolio weights. Plot the expected retum as a function of the portfolio volatility. Using your graph, identify the range of Johnson & Johnson's portfolio weights that yield efficient combinations of the two stocks, rounded to the nearest percentage point. 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. Expected Return 7% 10% Standard Deviation 16% 20% Johnson & Johnson Walgreens Boots Alliance Correlation 22% Expected Return Standard Deviation Weight in Johnson & Johnson's 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 0.70 0.75 0.80 0.85 0.90 0.95 1.00 Weight in Walgreens' 1.00 0.95 0.90 0.85 0.80 0.75 0.70 0.65 0.60 0.55 0.50 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 The set of efficient portfolios is approximately those portfolios with no more than invested in J&J. Johnson & Johnson and Walgreens Boots Alliance have expected retums and volatilities shown below, with a correlation of 22% Calculate the expected retum and the volatility (standard deviation) of a portfolio consisting of Johnson & Johnson's and Walgreens' stocks using a wide range of portfolio weights. Plot the expected retum as a function of the portfolio volatility. Using your graph, identify the range of Johnson & Johnson's portfolio weights that yield efficient combinations of the two stocks, rounded to the nearest percentage point. 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. Expected Return 7% 10% Standard Deviation 16% 20% Johnson & Johnson Walgreens Boots Alliance Correlation 22% Expected Return Standard Deviation Weight in Johnson & Johnson's 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 0.70 0.75 0.80 0.85 0.90 0.95 1.00 Weight in Walgreens' 1.00 0.95 0.90 0.85 0.80 0.75 0.70 0.65 0.60 0.55 0.50 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 The set of efficient portfolios is approximately those portfolios with no more than invested in J&J
