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I need to be able to set this problem up in excel, please provide formulas Ever since the day she took her first economics class

I need to be able to set this problem up in excel, please provide formulas

Ever since the day she took her first economics class in high school, Lydia wondered about the financial practices of her parents. They worked very hard to earn enough money to live a comfortable middle-class life, but they never made their money work for them, they simply deposited their hard-earned paychecks in savings accounts earning a nominal amount of interest. (Fortunately, there always was enough money available when it came time to pay her college bills.) She promised herself that when she became an adult, she would not follow the same financially conservative practices as her parents. And Lydia kept this promise. She took every available finance course in her business program at college. Having landed a coveted job on Wall Street upon graduation, she now begins every morning by watching the Bloomberg financial reports. She plays investment games on the internet, finding portfolios that maximize her return while minimizing her risk. And she reads The Wall Street Journal and Financial Times. Lydia also reads the investment advice columns of financial websites. She decides to follow the current advice given by her two favorite bloggers. In his monthly blog, editor Jonathan Taylor recommends three stocks that he believes will rise far above market average. In addition, the well-known mutual fund guru Donna Carter advocates the purchase of three additional stocks that she thinks will outperform the market over the next year. Bigbell (ticker symbol on the stock exchange: BB), one of the nations largest telecommunications companies, trades at a price-earnings ratio well below market average. Huge investments over the last eight months have depressed earnings considerably. However, with its new cutting-edge technology, the company is expected to significantly raise its profit margins. Taylor predicts that the stock will rise from its current price of $60 per square to $72 per share within the next year. Lotsofplace (LOP) is one of the leading hard drive manufacturers in the world. The industry recently underwent major consolidation, as fierce wars over the last few years were followed by many competitors going bankrupt or being bought by LOP and its competitors. Due to reduced competition in the hard drive market, revenues and earnings are expected to rise considerably over the next year. Taylor predicts a one-year increase of 42 percent in the stock of LOP from the current price of $127 per share. Internetlife (ILI) has survived the many ups and downs of Internet companies. With the next Internet frenzy just around the corner, Taylor expects a doubling of this companys stock price from $4 to $8 within a year. Healthtomorrow (HEAL) is a leading biotechnology company that is about to get approval for several new drugs from the Food and Drug Administration, which will help earnings to grow 20 percent over the next few years. In particular, a new drug to significantly reduce the risk of heart attacks is supposed to reap huge profits. Also, due to several new great-tasting medications for children, the company has been able to build an excellent image in the media. This public relations coup will surely have a positive effect on the sale of its over-the-counter medications. Carter is convinced that the stock will rise from $50 to $75 per share within a year. Quicky (QUI) is fast-food chain that has been vastly expanding its network of restaurants all over the United States. Carter has followed this company closely since it went public some 15 years ago when it had only a few dozen restaurants on the West Coast of the United States. Since then the company has expanded, and it now has restaurants in every state. Due to its emphasis on healthy foods, it is capturing a growing market share. Carter believes that the stock will continue to perform well above market average for an increase of 46 percent in one year from its current stock price of $150. Automobile Alliance (AUA) is a leading car manufacturer from the Detroit area that just recently introduced two new models. These models show very strong initial sales, and therefore the companys stock is predicted to rise from $20 to $26 over the next year. Using the Internet, Lydia found data about the risk involved in the stocks of these companies. The historical variances of return of the six stocks and their covariances are shown in the following tables. Company Stock Variance Company BB LOP ILI HEAL QUI AUA Variance 0.032 0.1 0.333 0.125 0.065 0.08 Companies Covariance Matrix Covariances LOP ILI HEAL QUI AUA BB 0.005 0.03 -0.031 -0.027 0.01 LOP 0.085 -0.07 -0.05 0.02 ILI -0.11 -0.02 0.042 HEAL 0.05 -0.06 QUI -0.02 Lydia wants to ensure that she receives an expected return of at least 35 percent. She wants to reach this goal at minimum risk. What investment portfolio allows her to do that?

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