Use the table of annual returns in Problem for Home Depot (HD) and Lowe€™s (LOW) to create an Excel spreadsheet that calculates 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). Also, calculate the portfolio standard deviation associated with each portfolio composition. You will need to use the standard deviations found previously for HD and LOW and their correlation coefficient.
In problem

Transcribed Image Text:

Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 20 11 HD Returns (%) -52.6 49.0 21.5 -4.3 1.0 -31.2 -114 30.6 24.9 23.5 LOW Returns(96) -19.1 48.0 4.2 16.1 6.0 -26.8 3.3 10.6 9.2 3.4