(Please use excel function to solve)

Refer to the table containing the share price of company T and W below:

Date	Share T price	Share W price
31-Dec-18	4.09	79.37
31-Jan-19	4.15	81.19
28-Feb-19	4.56	80.24
31-Mar-19	4.43	83.06
30-Apr-19	4.80	82.7
31-May-19	4.81	82.97
30-Jun-19	5.11	85.75
31-Jul-19	4.62	87.82
31-Aug-19	4.25	81.85
30-Sep-19	4.23	83.88
31-Oct-19	4.00	80.45
30-Nov-19	4.21	89.06
31-Dec-19	5.04	85.87

a) Compute the returns for both companies. Please use the return definition used in the labs. (1 mark)

(b) Compute the average return and standard deviation for each of the returns. (2 marks)

(c) Compute the Covariance between the returns. Provide a brief interpretation of what the Covariance measures. (2 marks)

(d) Assume that you construct a portfolio where you invest 40% in company T and 60% in company W. What is the average return and standard deviation of this portfolio? (2 marks)

(e) Assume that you construct a portfolio where you invest 60% in company T and 40% in company W. What is the average return and standard deviation of this portfolio? (2 marks)

(f) Based on the calculation in parts (d) and (e) above, which portfolio weighting you would like to choose, i.e., 40% in company T and 60% in company W or 60% in company T and 40% in company W? Please provide your reasoning. (1 mark)