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The data below presents monthly closing prices of Standard & Poors 500 Index, Wal-Mart, and Target to calculate the holding-period returns for the 24 months
The data below presents monthly closing prices of Standard & Poors 500 Index, Wal-Mart, and Target to calculate the holding-period returns for the 24 months from May 2013 through May 2015
Month | S&P500 | Walmart | Target | |
2013 | May | 1.631 | 74,84 | 69,50 |
June | 1.606 | 74,49 | 68,86 | |
July | 1.684 | 77,94 | 71,25 | |
August | 1.633 | 72,98 | 63,31 | |
September | 1.682 | 73,96 | 63,98 | |
October | 1.757 | 76,75 | 64,79 | |
November | 1.806 | 81,01 | 63,93 | |
December | 1.848 | 78,69 | 63,27 | |
2014 | January | 1.783 | 74,68 | 56,64 |
February | 1.859 | 74,70 | 62,54 | |
March | 1.872 | 76,43 | 60,51 | |
April | 1.884 | 79,71 | 61,75 | |
May | 1.924 | 76,77 | 56,76 | |
June | 1.960 | 75,07 | 57,95 | |
July | 1.931 | 73,58 | 59,59 | |
August | 2.003 | 75,50 | 60,07 | |
September | 1.972 | 76,47 | 62,68 | |
October | 2.018 | 76,27 | 61,82 | |
November | 2.068 | 87,54 | 74,00 | |
December | 2.059 | 85,88 | 75,91 | |
2015 | January | 1.995 | 84,98 | 73,61 |
February | 2.105 | 83,93 | 76,83 | |
March | 2.068 | 82,25 | 82,07 | |
April | 2.086 | 78,05 | 78,83 | |
May | 2.182 | 75,86 | 79,29 |
Make a comparison of the average returns and the standard deviations for all the individual assets and the portfolio that was created. What conclusions can be reached by your comparison in the context of the risk and return (hint: think about the benefits of the diversification)?
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