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PLEASE SOLVE THE QUESTION USING EXCEL ONLY!!! SHOW ALL FOMRULAS USED IN EXCEL I 3% 6. The following table contains the probability distribution for the
PLEASE SOLVE THE QUESTION USING EXCEL ONLY!!! SHOW ALL FOMRULAS USED IN EXCEL
I 3% 6. The following table contains the probability distribution for the returns of three securities over the next year. Expected Returns Scenario Probability II III T-bills #1 0.03 -17% 5% 33% 3% #2 0.07 -9% 11% 17% 3% #3 0.15 7% 17% 7% #4 0.50 14% 25% 1% 3% #5 0.15 19% 29% -9% 3% #6 0.07 27% 34% -17% 3% #7 0.03 35% 44% -27% 3% a) Determine the expected return and standard deviation of each security. b) Calculate a variance and covariance matrix for these four securities using the given probabilities. c) Calculate a set of five portfolios that make up the capital market line using the Solver. d) Create a chart of the CML including the original securities I 3% 6. The following table contains the probability distribution for the returns of three securities over the next year. Expected Returns Scenario Probability II III T-bills #1 0.03 -17% 5% 33% 3% #2 0.07 -9% 11% 17% 3% #3 0.15 7% 17% 7% #4 0.50 14% 25% 1% 3% #5 0.15 19% 29% -9% 3% #6 0.07 27% 34% -17% 3% #7 0.03 35% 44% -27% 3% a) Determine the expected return and standard deviation of each security. b) Calculate a variance and covariance matrix for these four securities using the given probabilities. c) Calculate a set of five portfolios that make up the capital market line using the Solver. d) Create a chart of the CML including the original securitiesStep by Step Solution
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