The table below shows annual returns on Archer Daniels Midland (ADM) and Walmart. The last column of the table shows the annual return that a portfolio invested 50% in ADM and 50% in Walmart would have earned in 1993. The portfolio€™s return is simply a weighted average of the returns of ADM and Walmart.

a. Plot a graph similar to Figure 6.7 showing the returns on ADM and Walmart each year.
b. Fill in the blanks by calculating the 50-50 portfolio€™s return each year from 1994-2010 and then plot this on the graph you created for part (a). How does the portfolio return compare to the returns of the individual stocks in the portfolio?
c. Calculate the standard deviation of ADM, Walmart, and the portfolio and comment on what you find.

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AMD Walmart 50-50 Portfolio Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1.5% 374% -11.2% 31.1% 10.0% 15.3% 23.5% 32.9% 1.9% 12.1% 25.1% 22.7% | -10.6% = (0.5 X 1.5% + 0.5 X-22.7% -24.6% 5.5% 8.0% 50.7% 76.8% 61.2% 9.5% 15.6% 18.1%