a. Use the data given to calculate annual returns for Grosman, Landow, and the Market Index, and then calculate average returns over the five-year period. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate the rate of return for 2016 because vou do not have 2015 data.l We now calculate the rates of return for the two companies and the index: Note: To get the average, you could get the column sum and divide by 5 , but you could also use the function wizard, fx. Click fx, then statistical, then Average, and then use the mouse to select the proper range. Do this for Grosman and then copy the cell for the other items. b. Calculate the standard deviation of the returns for Grosman, Landow, and the Market Index. (Hint: Use the sample standard deviation formula given in the chapter, which corresponds to the STDEV Use the function wizard to calculate the standard deviations. c. Construct a scatter diagram graph that shows Grosman's and Landow's returns on the vertical axis and the Market Index's returns on the horizontal axis. It is easiest to make scatter diagrams with a data set that has the X-axis variable in the left column an we refnrmat the returne data ralrulaten ahnues and chniw it iuct helnis To make the graph, we first selected the range with the returns and the column heads, then clicked the chart wizard, then choose the scatter diagram without connected lines. That gave us the data points. We then used the drawing toolbar to make free-hand ("by eye") regression lines, and changed the lines color and weights to d. Estimate Grosman's and Landow's betas as the slopes of regression lines with stock returns on the vertical axis (y-axis) and market return on the horizontal axis ( x-axis). (Hint: use Excel's SLOPE function.) Are these betas consistent with vour araph? e. The risk-free rate on long-term Treasury bonds is 6.06%. Assume that the market risk premium is 5.01%. What is f. If you formed a portfolio that consisted of 60% Grosman stock and 40% Landow stock, what would be its beta and its required return? g. Suppose an investor wants to include Grosman Industries' stock in his or her portfolio. Stocks A, B, and C are currently in the portfolio, and their betas are 0.739,0.905, and 1.523, respectively. Calculate the new portfolio's required return if it consists of 35% of Grosman, 15\% of Stock A, 30% of Stock B, and 20% of Stock C