$1.$ Apply all three methods $($regression$,$ scatter plot, and formula$)$ explained on the excel file below.

$$ Using the same "stock returns" file as above, construct a portfolio with $40\%$ of funds invested in stock A$,60\%$ invested in stock B$,$ and calculate the following:

a$.$ Portfolio expected return rp$,$ and portfolio standard deviation P$.(20$ points$)$ b$.$ What can you say about A$,$ B$,$ P$?$ A$,$ and B can be computed using the excel function for standard deviation.

Hint: Use excel formula to compute the average return for each stock, rA and rB$,$ and the correlation between the two stocks, corr$($A$,$ B$).$ Then use the formulas for portfolio expected return rp and portfolio standard deviation, P to compute them.

Excel File:

Stocks $($A and B$),$ and Market $($M$)$ Returns $$

M $$A $$ B

$8/1/20231-4\mathrm{.}871929-1\mathrm{.}294802-3\mathrm{.}459323$

$9/1/20232-2\mathrm{.}1979692\mathrm{.}16737\mathrm{.}080408$

$10/1/202338\mathrm{.}917926-4\mathrm{.}70785312\mathrm{.}0683$

$11/1/202344\mathrm{.}4229171\mathrm{.}249756-0\mathrm{.}555718$

$12/1/202351\mathrm{.}5895745\mathrm{.}2073295\mathrm{.}727273$

$1/1/202465\mathrm{.}1720626\mathrm{.}39784\mathrm{.}038744$

$2/1/202473\mathrm{.}1018762\mathrm{.}6705721\mathrm{.}900873$

$3/1/20248-4\mathrm{.}161504-1\mathrm{.}023662-7\mathrm{.}461654$

$4/1/202494\mathrm{.}80212210\mathrm{.}800276\mathrm{.}627484$

$5/1/2024103\mathrm{.}4669763\mathrm{.}3205817\mathrm{.}859491$

$6/1/2024111\mathrm{.}1321351\mathrm{.}362559-6\mathrm{.}399193$

$7/1/2024122\mathrm{.}28346912\mathrm{.}52192-0\mathrm{.}289751$

$8/1/202413-0\mathrm{.}271054\mathrm{.}6097913\mathrm{.}590384$