https://docs.google.com/spreadsheets/d/1Gn4h2Nx6E4KtOnnnMXOOmNIjO9xhqg-A_2SyUae0rjg/edit#gid=0

Download Fania/French Factors . Import this data into excel. A. Annualized the returns and put them in decimal form. (multiply each observation) by 12/100) Calculate the mean variance and standard deviation for the market return and construct covariance and correlation coefficient tables between the market return and the 2 portfolios that would have been best to keep from Homework 4. (Think about which two portfolios had the best risk return trade ofThis is similar to the last homework. Notice that the data gives you a return of market minus the risk free rate, for the market return please add back in the risk free rate to create a new variable market return. B. Paste means, variances, standard deviations, and covariance and correlation coefficient tables into a new worksheet. C. Create three columns of 5000 random numbers(r1, r2 and r3). Use these random numbers to create three columns of weights to go into your portfolio(these weights are allocations to the 'best two industries' and the market portfolio), weight one=r1/(r1+r2+r3), weight two=r2/(r1+r2+r3), and weight three=r3/(r1+r2+r3). [Here is a helpful function in excel, =rand () , this generates a random number between 0 and 1] 0. Calculate the returns, variances and standard deviations using the 5000 sets of weights for the 5000 different portfolios. (Remember to use covariances or correlation coefficients.) E. Graph returns over standard deviation. Save and store your work, turn in graph and the answer to part A