please help me do the investment project. see questions and instructions in the word file.

Part One: International Portfolio Management 1. Go to http://finance.yahoo.com, download monthly Adj. close prices (adjusted for dividend and stock split) from 12/1/2008 through 12/31/2013 for the following three country indexes. Country USA S&P 500 India Korea Ticker ^GSPC ^BSESN ^KS11 Note: Historical T-bill rates are provided in a separate EXCEL file. 2. Compute monthly holding period return using Adj. close prices. 3. Use the EXCEL statistical functions to compute mean (using AVERAGE) and standard deviation (using STDEV) of the monthly return for each index. Assume that historical mean returns are good estimates of expected returns. 4. To achieve international diversification, John invests in the USA and India indexes. What are the weights on the two indexes to achieve the optimal international portfolio? What are the mean and standard deviation of returns on his optimal international portfolio? [All calculations should be done in EXCEL.] 5. Mary instead invests in the USA and Korean indexes. What are the weights on the two indexes to achieve the optimal international portfolio? What are the mean and standard deviation of returns on her optimal international portfolio? [All calculations should be done in EXCEL.] 6. Discuss whose optimal portfolio performs better (John or Mary), and explain why. Also discuss potential reason(s) that causes the difference. (At least a half or one page discussion, double space) Use the following statistical functions in excel: 1. Function AVERAGE for mean 2. Function STDEV for standard deviation 3. Function COVAR for covariance 4. Function CORREL for correlation coefficient 1 Part Two: Estimation of Beta Please complete the following requirements for two stocks, Dynex Capital Inc. (ticker DX); International Paper Company (ticker IP). 1. Download monthly Adj. close prices (adjusted for dividend and stock split) from 12/1/2008 through 12/31/2013 for each stock. 2. Compute monthly holding period return using Adj. close prices. 3. Suppose we consider the USA S&P 500 index (^GSPC) as the market portfolio. Estimate betas of DX and IP based on the single index model regressions, and show your regression output. (see chapter 7, page 203-206 of the textbook). 4. Calculate mean return, STD, and beta of the two portfolios: Portfolio A (90% in ^GSPC / 10% in DX), Portfolio B (90% in ^GSPC /10% in IP). Must show your calculation. 5. Based on the regression results, which stock (DX or IP) has a larger fraction (among the total variance) of firm-specific variance (risk)? And explain why? 6. Based on the regression results, is there any arbitrage opportunity of trading the three securities, ^GSPC, DX and IP? Is the arbitrage opportunity reliable? And explain why? (At least a half page discussion, double space) Detailed Explanation and Requirement * You can do much of the research over the internet (e.g., http://finance.yahoo.com), and calculations should be done in EXCEL. *The project can be completed by a group of five (or fewer) students. Group project is HIGHLY encouraged. It is your responsibility to make sure the accuracy of the work done by your colleagues. ALL MEMBERS OF YOUR GROUP WILL RECEIVE THE SAME GRADE ON THE PROJECT. Please submit ONE copy for each group with all group members' names listed. No credit will be given to a student unless both his/her first and last names are included in the project. * The hard copy and e-copy must include the following information: 1. Lists of dates, Adj. close prices, and monthly holding period returns of all the indexes and securities in Part One and Part Two. 2. Mean and standard deviation of all the indexes and securities returns. 3. Analysis for #4 through #5 in Part One. 4. Beta of DX and IP, and show your regression output. 5. Mean return, STD, and beta of the two portfolios: Portfolio A (90% in ^GSPC /10% in DX), Portfolio B (90% in ^GSPC /10% in IP). Must show your calculation. 6. Written discussions addressing the questions that are raised above in Part One and Part Two. Any data, analysis, and evidence you used to support your argument must be presented in the hard copy and e-copy. 2 Example of data presentation: Date 12/2/2013 11/1/2013 10/1/2013 9/2/2013 8/1/2013 7/1/2013 6/3/2013 5/2/2013 ^GSPC Adj. Closing Price 1.43 2.45 2.48 2.14 2.87 5.95 11.44 12.19 ^BSESN Adj. Closing Price 77.1 79.2 75.4 78.5 74.6 74.8 78.4 79.1 ^KS11 Adj. Closing Price 6.6 7.75 4.72 4.18 10.19 11.18 16.86 20.95 ^GSPC ^BSESN HPR HPR ^KS11 HPR Mean STD 3 The following is the historical annual rate on 1-year T-bill. Date 2013-12 2013-11 2013-10 2013-09 2013-08 2013-07 2013-06 2013-05 2013-04 2013-03 2013-02 2013-01 2012-12 2012-11 2012-10 2012-09 2012-08 2012-07 2012-06 2012-05 2012-04 2012-03 2012-02 2012-01 2011-12 2011-11 2011-10 2011-09 2011-08 2011-07 2011-06 2011-05 2011-04 2011-03 2011-02 2011-01 2010-12 2010-11 2010-10 2010-09 2010-08 2010-07 2010-06 2010-05 T-bill rate (%) 0.13 0.12 0.12 0.12 0.13 0.12 0.14 0.12 0.12 0.15 0.16 0.15 0.16 0.18 0.18 0.18 0.18 0.19 0.19 0.19 0.18 0.19 0.16 0.12 0.29 0.25 0.23 0.26 0.26 0.29 0.32 0.37 0.45 0.40 0.35 0.35 0.37 0.31 0.37 0.40 0.46 0.48 0.51 0.50 2010-04 2010-03 2010-02 2010-01 2009-12 2009-11 2009-10 2009-09 2009-08 2009-07 2009-06 2009-05 2009-04 2009-03 2009-02 2009-01 2008-12 0.55 0.64 0.62 0.44 0.49 1.07 1.42 1.91 2.18 2.28 2.42 2.06 1.74 1.54 2.05 2.71 3.26