7. Herbert Investments wants to prepare a portfolio comprising three stocks. They would like to earn at least a 9% return at lowest possible risk __ "n _\" a. Find the optimal solution using an Excel spreadsheet model and Solver. Attach your spreadsheet model with the optimal solution. LLR: % LZR: % TFE: % Portfolio standard deviation: b. Suppose instead that they wanted to maximize the return for a portfolio with a maximum portfolio standard deviation of 0.11. Find the optimal solution using an Excel spreadsheet model and Solver. Attach your spreadsheet model with the optimal solution. LLR: % LZR: % TFE: % Portfolio return: A B C D E F G H J K W NH LLR LZR TFE Mean Return 0.07 0.09 0.1 STDEV of Return 0.05 0.15 0.18 UI A 6 Correlations LLR LZR TFE 7 LLR 1 0.7 0.3 8 LZR 0.7 1 0.5 9 TFE 0.3 0.5 1 10 11 Investment Decisions 12 LLR LZR TFE 13 Fractions to Investment 23% 30% 46% 14 Total Invested Required Valuue 15 Constraint on fractions 100% = 100% 16 17 Constrant on expected portfolio return Actual Return Required Return 18 9% >= 9% 19 20 p*Std Dev 0.01160322 0.04557249 0.08354159 21 22 Portfolio Variance 0.0143198 23 24 Portfolio Return 25