CHAPTER 8 Risk and Return 407 Spreadsheet Exercise Jane is considering investing in three different stocks or creating three distinct two- stock portfolios. Jane considers herself to be a rather conservative investor. She is able to obtain forecasted returns for the three securities for the years 2015 through 2021. The data are given in the following table. YearStock A Stock B Stock C 10% 10% 13 15 14 16 14 12 12%- 14 10 2016 2017 2018 2019 2020 2021 12 10 15 10 In any of the possible two-stock portfolios, the weight of each stock in the portfolio will be 50%. The three possible portfolio combinations are AB, AC, and BC. TO DO Create a spreadsheet similar to Tables 8.6 and 8.7 to answer the following: a. Calculate the expected return for each individual stock. b. Calculate the standard deviation for each individual stock. c. Calculate the expected returns for portfolios AB, AC, and BC d. Calculate the standard deviations for portfolios AB, AC, and BC. e. Would you recommend that Jane invest in the single stock A or the portfolio consisting of stocks A and B? Explain your answer from a risk-return viewpoint. Would you recommend that Jane invest in the single stock B or the portfolio consisting of stocks B and C? Explain your answer from a risk-return viewpoint. f. MyFinanc ceLab Visit www.myinancelab.com for Chapter Cases Analyzing Risk and Return on chargers Products Investments, Group Exercises, and numerous online resources