Question 1. (25 marks in total) (a) Calculate each stock's average monthly return, its return variance and standard deviation and beta over the period 07/2015 to 05/2020, using the price information of the FTSE All Share Index as a proxy for market portfolio Summarize your results in a table, and briefly describe how these are calculated (Please do not use Excel functions as your explanation). (9 marks) (b) Construct three types of portfolios. Portfolio A consists of any 3 of the stocks, Portfolio B consists of any 6 of the stocks, and Portfolio C consists of all 10 stocks. Assuming that each stock has equal weight in the portfolio, calculate Portfolio A, B, and C's average monthly returns, return variances and standard deviations, and betas. Summarize your results in a table, and briefly describe how these are calculated (Please do not use Excel functions as your explanation). (8 marks) (c) If you rank portfolio A, B and Caccording to their betas and return variances respectively, will the three portfolios have same ranking? Can you provide economic reasons as to why the two rankings should be (in)consistent with each other? (8 marks) Question 2. (15 marks in total) (a) If you are asked to construct your own portfolio by using information about the individual stocks in the excel spreadsheet, are there any stocks which you should not include in your portfolio? Can you provide your justifications? (You may draw performance graphs of one stock against the market portfolio). (9 marks) (b) Construct your own portfolio which consists of a different number of stocks from Portfolio A, B, and C and is "the best" for its return/risk characteristics. And can you justify why you choose such a portfolio? (6 marks) Question 1. (25 marks in total) (a) Calculate each stock's average monthly return, its return variance and standard deviation and beta over the period 07/2015 to 05/2020, using the price information of the FTSE All Share Index as a proxy for market portfolio Summarize your results in a table, and briefly describe how these are calculated (Please do not use Excel functions as your explanation). (9 marks) (b) Construct three types of portfolios. Portfolio A consists of any 3 of the stocks, Portfolio B consists of any 6 of the stocks, and Portfolio C consists of all 10 stocks. Assuming that each stock has equal weight in the portfolio, calculate Portfolio A, B, and C's average monthly returns, return variances and standard deviations, and betas. Summarize your results in a table, and briefly describe how these are calculated (Please do not use Excel functions as your explanation). (8 marks) (c) If you rank portfolio A, B and Caccording to their betas and return variances respectively, will the three portfolios have same ranking? Can you provide economic reasons as to why the two rankings should be (in)consistent with each other? (8 marks) Question 2. (15 marks in total) (a) If you are asked to construct your own portfolio by using information about the individual stocks in the excel spreadsheet, are there any stocks which you should not include in your portfolio? Can you provide your justifications? (You may draw performance graphs of one stock against the market portfolio). (9 marks) (b) Construct your own portfolio which consists of a different number of stocks from Portfolio A, B, and C and is "the best" for its return/risk characteristics. And can you justify why you choose such a portfolio? (6 marks)