Chapter 7, Portfolio Theory              This problem, similar to problem 7-3 from the text, extends that problem to illustrate the impact         of different weights, and correlations on the standard deviation of two-security portfolios.                       Assignment:              You are provided with multiple year return information for four scenarios in parts a) through d).         Please calculate the expected returns, variances, standard deviations, covariances, and correlations        for each part. The answers are provide for your guidance but you must replace the raw numbers with        the appropriate equations or Excel functions.            Please note that when you assign weights for a two-security portfolio, one weight will be "x" and the other will be "1-x".                    Graph the results for each each part placing the standard deviations on the horizontal axis and returns on verticle axis.                                                 Part a)               Zenon Dynamics Year            Zenon Returns Dynamics Returns             0.0989 -0.4767 2019            -0.1234 0.3079 2018            0.1356 0.2478 2017            0.3456 0.0789 2016            -0.1523 0.2442 2015            0.2009 0.3456 2014            0.0756 0.6756 2013            0.1647 0.4467 2012            0.1834 0.7856 2011            0.1556 0.51 2010                                       Expected Return 10.85% 31.66%            Variance 2.22% 12.22%  14.89% 34.96%         Standard Deviation 14.89% 34.96%                          Covarianace 0.14%             Correlation 0.027             Weight Zenon 0.5 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1   Weight Dynamics 0.5 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9                 Expected Portfolio Return 0.21251 0.10846 0.12927 0.15008 0.17089 0.1917 0.21251 0.23332 0.25413 0.27494 0.29575   Portfolio Variance 0.036798681 0.022160472 0.019426268 0.019523 0.022451 0.028209 0.036799 0.048219 0.06247 0.079553 0.099466   Portfolio Standard Deviation 0.191829823 0.148863936 0.139378148 0.139725 0.149835 0.167956 0.19183 0.219588 0.249941 0.282051 0.315382                                             Part b)               Sunglasses Umbrellas Year            Returns Returns             0.05 1 2019            0.1 0.9 2018            0.15 0.8 2017            0.2 0.7 2016            0.25 0.6 2015            0.3 0.5 2014            0.35 0.4 2013            0.4 0.3 2012            0.45 0.2 2011            0.5 0.1 2010                                       Expected Return 0.275 0.55            Variance 0.022916667 0.091666667            Standard Deviation 0.151382518 0.302765035                          Covarianace -0.045833333             Correlation -1             Weight Sunglasses 0.5 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 -1E-15  Weight Umbrella 0.5 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1                Expected Portfolio Return 0.4125 0.275 0.3025 0.33 0.3575 0.385 0.4125 0.44 0.4675 0.495 0.5225 0.55  Portfolio Variance 0.005729167 0.022916667 0.011229167 0.003667 0.000229 0.000917 0.005729 0.014667 0.027729 0.044917 0.066229 0.091667  Portfolio Standard Deviation 0.075691259 0.151382518 0.105967762 0.060553 0.015138 0.030277 0.075691 0.121106 0.166521 0.211936 0.25735 0.302765                              Part c)               Rain Coats Umbrellas Year            Returns Returns             0.5 0.5 2019            0.45 0.45 2018            0.4 0.4 2017            0.35 0.35 2016            0.3 0.3 2015            0.25 0.25 2014            0.2 0.2 2013            0.15 0.15 2012            0.1 0.1 2011            0.05 0.05 2010                                       Expected Return 0.275 0.275            Variance 0.022916667 0.022916667            Standard Deviation 0.151382518 0.151382518                          Covarianace 0.022916667             Correlation 1             Weight Rain Coats 0.5 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 -1E-15  Weight Umbrella 0.5 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1                Expected Portfolio Return 0.275 0.275 0.275 0.275 0.275 0.275 0.275 0.275 0.275 0.275 0.275 0.275  Portfolio Variance 0.022916667 0.022916667 0.022916667 0.022917 0.022917 0.022917 0.022917 0.022917 0.022917 0.022917 0.022917 0.022917  Portfolio Standard Deviation 0.151382518 0.151382518 0.151382518 0.151383 0.151383 0.151383 0.151383 0.151383 0.151383 0.151383 0.151383 0.151383                              Part d)               Vacumn Umbrellas Year            Returns Returns             0.275 0.5 2019            0.275 0.45 2018            0.275 0.4 2017            0.275 0.35 2016            0.275 0.3 2015            0.275 0.25 2014            0.275 0.2 2013            0.275 0.15 2012            0.275 0.1 2011            0.275 0.05 2010                                       Expected Return 0.275 0.275            Variance 3.42388E-33 0.022916667            Standard Deviation 5.85139E-17 0.151382518                          Covarianace -2.22552E-33             Correlation -2.51245E-16             Weight Vacumn 0.5 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 -1E-15  Weight Umbrella 0.5 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1                Expected Portfolio Return 0.275 0.275 0.275 0.275 0.275 0.275 0.275 0.275 0.275 0.275 0.275 0.275  Portfolio Variance 0.005729167 3.42388E-33 0.000229167 0.000917 0.002062 0.003667 0.005729 0.00825 0.011229 0.014667 0.018563 0.022917  Portfolio Standard Deviation 0.075691259 5.85139E-17 0.015138252 0.030277 0.045415 0.060553 0.075691 0.09083 0.105968 0.121106 0.136244 0.151383