(c) Below is part of a client's Investment Policy Statement (IPS) and a list of financial products that she is considering. IPS Objectives Return: 4-10% per annum Risk: Low - able to tolerate a loss no more than 5% of the total amount invested Constraints and Preferences Investment horizon: 1-2 years. Social- and environmental-friendly companies or industries preferred. 1 No Financial product S&P 500 with an estimated annual retum of 4.5% 2 Small-cap fund with an estimated annual return of 8% and moderate risk 3 Private equity Initial coin offering of a cryptocurrency with high retum potentials that expects to be listed on exchange after 3 years 5 Stocks of a tobacco company 6 AAA-rated corporate bond 4 There is also a note which says that the client has stable income that well satisfies her living costs and usual expenditure and she has no debts. Analyse the client's risk aversion type. Specifically, does the ability and willingness to take risk match? What is your suggestion to her portfolio manager? Based on her IPS information list the products that you will NOT recommend to her and discuss your reasons. Round off your answer to two (2) decimal points for the calculation. Any rates or returns expressed in percentage is preferred. The table below summarises the investment information of stocks in Company A, B, and C. What is the risk-free rate? Write the corresponding Excel formula. Based on the IPS, which stock should the client invest in and why? B 1 Investment Return 2 Stock in Company A 15.10% 3 Stock in Company B 5.80% 4 Stock in Company C 8.50% Variance Sharpe Ratio 21.00% 0.29 12.20% 0.11 5.80% 0.27 (12 marks)