(Please Use Excel and show all the work and formulas)

Q12 As the junior analyst of an upstart investment firm, you have been assigned to analyze the following three companies for a client: Amazon (AMZN), Disney (DIS), and Costco (COST). Specifically, the client would like to look at the performances of these three companies during the period from February 15, 2002 to February 15, 2022.

a. Using the series of adjusted closing prices, calculate the monthly returns for the three companies.

b. Calculate the arithmetic average monthly returns for the three companies.

c. Calculate the standard deviation of the monthly returns for the three companies.

d. Determine the coefficient of variation for the three companies using (b) and (c). Discuss your findings.

e. Using the monthly return information of the three companies (from a), determine the correlation for the following pairs of companies: (1) Amazon and Disney, (2) Amazon and Costco, and (3) Disney and Costco. What can you say about the relationships as demonstrated by the correlation coefficients? Explain.

f. Using the arithmetic average return as a proxy for a companys expected return and the standard deviation as a proxy for risk, determine the asset allocations that will lead to the lowest possible level of risk if an investor is interested in putting together portfolios that contain only: (1) Amazon and Disney, (2) Amazon and Costco, and (3) Disney and Costco.