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The following table, contains annual returns for the stocks of Home Depot (HD) and Lowe's (LOW). The returns are catcutated using end-of-yoar prices (adjusted for
The following table, contains annual returns for the stocks of Home Depot (HD) and Lowe's (LOW). The returns are catcutated using end-of-yoar prices (adjusted for dividends and stock splits). Use the information for Home Depot (HD) and Lowe's (LOW) to create an Excel spreadsheet that calculates the average returns for portfolios comprised of HD and LOW using the following. respective, weightings: (1.0,0.0),(0.9,0.1),(0.8,0.2),(0.7,0.3),(0.6,0.4),(0.5,0.5),(0.4,0.6), (0.3,0.7),(0.2,0.8),(0.1,0.9), and (0.0,1.0). The average annual retums for HD and LOW are 17.45% and 12.92% respectively. Also, calculate the portfolio standard deviation associated with each portfolio composition. The standard deviation for Home Dopot and Lowe's and their correlation coefficient are 23.84%,20.86%, and 0.82913 respectively. (Hint: Review Table 5.2.) Enter the average return and standard deviation for a portfolio with 100% Home Depot and 0% Lowe's in the table below. (Round to two decimal places.) Data table (Click on the icon here D in order to copy its contents of the data table below into a spreadsheet)
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