Question: Write the answers please not the speadsheet formula Note: Although not absolutely necessary, you are advised to use a computer spreadsheet to work the following

Write the answers please not the speadsheet formula  Write the answers please not the speadsheet formula Note: Although not
absolutely necessary, you are advised to use a computer spreadsheet to work
the following problem. a. Use the price data from the table in
the popup window, , for the Standard \& Poor's 500 Index, Walmart,

Note: Although not absolutely necessary, you are advised to use a computer spreadsheet to work the following problem. a. Use the price data from the table in the popup window, , for the Standard \& Poor's 500 Index, Walmart, and Target to calculate the holding-period returns for the 24 months from May 2013 through May 2015. b. Calculate the average monthly holding-period returns and the standard deviation of these returns for the S\&P 500 Index, Walmart, and Target. c. From the following graphs, describe the nature of the relationship between the stock returns for Walmart and the returns for the S\&P 500 Index. d. Assume that you have decided to invest one-half of your money in Walmart and the remainder in Target. Calculate the monthly holding-period returns for your two-stock portfolio. (Hint: The monthly return for the portfolio is the average of the two stocks' monthly returns.) e. The table in the popup window, , shows the returns on an annualized basis that were realized from holding long-term government bonds for the same period. Calculate the average monthly holding-period returns and the standard deviations of these returns. (Hint: You wi need to convert the annual returns to monthly returns by dividing each retum by 12 months.) f. Now assuming that you have decided to invest equal amounts of money in Walmart, Target, and long-term government securities, calculate the monthly returns for your three-asset portfolio. What are the average return and the standard deviation? g. Make a comparison of the average returns and the standard deviations for all the individual assets and the two portfolios that we designed. What conclusions can be reached by your comparison? h. According to Standard \& Poor's, the betas for Walmart and Target are 0.28 and 0.75 , respectively. Compare the meaning of these betas relative to the standard deviations calculated above. 1. Assume that the current Treasury bill rate is 3 percent and that the expected market return is 10 percent. Given the betas for Walmart and Target in part h, estimate an appropriate rate of return for the two firms. (Click on the following icon in order to copy its contents into a spreadsheet.) (Click on the following icon in order to copy its contents into a spreadsheet.) \begin{tabular}{|l|c|c|} \hline MONTH & S\&P 500 & HPR \\ \hline May-13 & $1,631 & % \\ \hline Jun-13 & $1,606 & % \\ \hline Jul-13 & $1,686 & % \\ \hline Aug-13 & $1,633 & % \\ \hline Sep-13 & $1,682 & % \\ \hline Oct-13 & $1,757 & % \\ \hline Nov-13 & $1,806 & % \\ \hline Dec-13 & $1,848 & % \\ \hline Jan-14 & $1,783 & % \\ \hline Feb-14 & $1,859 & % \\ \hline Mar-14 & $1,872 & % \\ \hline Apr-14 & $1,884 & % \\ \hline May-14 & $1,924 & % \\ \hline Jun-14 & $1,960 & % \\ \hline Jul-14 & $1,931 & % \\ \hline Aug-14 & $2,003 & % \\ \hline Sep-14 & $1,972 & % \\ \hline Oct-14 & $2,018 & % \\ \hline Nov-14 & $2,068 & % \\ \hline Dec-14 & $2,059 & % \\ \hline Jan-15 & $1,995 & % \\ \hline Feb-15 & $2,105 & % \\ \hline Mar-15 & $2,068 & % \\ \hline Apr-15 & 2,128 & % \\ \hline May-15 & % \\ \hline \end{tabular}

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