Pick a stock (It can be any stock, as long as it is a common stock traded in NYSE/Nasdaq/Amex).

(1) Obtain its 5-year historical daily prices (1/1/2014 12/31-2018) on Yahoo finance and calculate its daily holding period returns.

(2) Generate a summary statistics report on its holding period returns.

(3) Create a Histogram chart on its holding period returns.

(4) Estimate its annualized volatility using all the holding period returns.

(5) Use the S&P 500 holding period returns during the same period as market return, run a regression to estimate the beta of this stock. Y: stock return minus risk-free rate. X: market return minus risk-free rate. You can find risk-free rate, which can be 1-year Treasury bill yield from any online source. For simplicity, you can assume risk-free rate is the same across our sample period.

(6) Once beta is estimated, calculate the expected return of this stock using CAPM. According to CAPM, Expected return = Rf + beta*(Rm-Rf). Note that Rf should be an annual return, Rm should also be an annualized return, which can be calculated using S&P 500 data from part (5).

(7) Use the expected return and annualized volatility you estimated from previous parts (part 4 and 6), simulate daily stock prices for the next 252 days, assuming stock prices follow Geometric Brownian Motion.

(8) Pick another 3 stocks, and repeat (1)-(7) for these 3 stocks. If your group only has 3 members, you may pick another 2 stocks instead of 3 stocks for this part.

(9) Form a portfolio with all 4 (or 3) stocks above. The mean of each stock should be the expected return from part 6, and S.D. of each stock should be the annualized volatility from part 4. Estimate the correlation coefficients matrix among all stock returns using CORREL function.

(10) Set a target portfolio return, use Solver to estimate the optimal weights for all stocks in your portfolio. (Tip: If your solver is unable to give you a solution, consider changing your target portfolio return to a more realistic number, for example, if all your stocks have expected returns around 10% based on CAPM, setting a target portfolio return of 20% will probably not work.)

Do it with excel and show the work process.