The following table contains annual returns for the stocks Home Depot $($HD$)$ and Lowes The tivo atoicks,

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$($LOW$).$ The returns are calculated using end$-$of$-$year prices $($adjusted for dividends and

stock splits$).$

c$.$ Use Excel or other software to create an efficient frontier of portfolios between

the two stocks.

d$.$ If the risk$-$free rate is $1\%,$ what is the portfolio with the max Sharpe ratio?

Year HD LOW

$2005-4\mathrm{.}3\%16\mathrm{.}1\%$

$20061\mathrm{.}0\%-6\mathrm{.}1\%$

$2007-31\mathrm{.}1\%-26\mathrm{.}8\%$

$2008-11\mathrm{.}4\%-3\mathrm{.}3\%$

$200930\mathrm{.}5\%10\mathrm{.}6\%$

$201025\mathrm{.}0\%9\mathrm{.}2\%$

$201123\mathrm{.}5\%3\mathrm{.}4\%$

$201250\mathrm{.}3\%42\mathrm{.}9\%$

$201335\mathrm{.}9\%41\mathrm{.}8\%$

$201430\mathrm{.}2\%41\mathrm{.}2\%$