The airline industry is severely hit by the COVID-19.
Rows 6 to 85 show the daily closing prices of three stocks (i.e.,Qantas Airways Limited (QAN.AX), Singapore Airlines Limited (C6L.SI), and Cathay Pacific Airlines (0293.HK)) in the airline industry between 1 April 2020 and 30 July 2020. The data were collected from Yahoo Finance. When answering these questions, ignore dividends and assume all prices are in the same currency.

a. (5 marks) Design an Excel financial model that can help to evaluate this investment plan. Marks will be allocated for the presentation and clarity of your model (e.g., if there are clear headings, clear arrangement for input cells, appropriate use of colors, have some degree of flexibility, generate warning messages for wrong user inputs, etc.). The Excel financial model should enable you to consider the investment plan and answer the following questions:

b. (3 marks) For each stock, show the daily stock returns.

c. (3 marks) Based on the responses in part (b), calculate the average daily stock returns and standard deviation for each stock.

d. (2 marks) Calculate the correlation of daily stock returns between each pair of stocks.

e. (4 marks) Suppose that you invest 20% in Singapore Airlines Limited, 50% in Qantas Airways Limited and 30% in Cathay Pacific Airlines. Calculate the portfolio expected return, variance and standard deviation.

f. (4 marks) How does the expected return and standard deviation change if you decide to invest 30% in Singapore Airlines Limited, 60% in Qantas Airways Limited, and 10% in Cathay Pacific Airlines? Explain your answers.

g. (5 marks) Find the weights of Singapore Airlines Limited, Qantas Airways Limited and Cathay Pacific Airlines that will provide a daily return of 0.01% with the lowest level of risk. h. (5 marks) Plot a scatter diagram showing the portfolios from parts (e), (f) and (g), with the X-axis displaying standard deviation and the Y-axis displaying daily returns.

i. (4 marks) If the daily risk-free rate is 0.1%, estimate the Sharpe ratio for the portfolios mentioned in parts (e), (f) and (g) and highlight the highest Sharpe ratio using conditional formatting.

PLEASE USE EXCEL TO DESCRIBE YOUR WORKINGS, FOR BETTER UNDERSTANDING PURPOSES. THANKS!

5.56 5.65 5.5 5.75 6.03 5.98 6.13 Cathay Pacific Airlines (0293.HK) 8.12 8.2 8.19 8.27 8.5 8.61 9.04 9.12 8.93 9.01 9.36 9.39 8.9 9.02 8.98 6.25 6.17 6.15 6.23 6.23 Date Qantas Airways Limited (QAN.AX) 1/4/2020 2/4/2020 3/4/2020 6/4/2020 7/4/2020 8/4/2020 9/4/2020 14/4/2020 15/4/2020 16/4/2020 17/4/2020 20/4/2020 21/4/2020 22/4/2020 23/4/2020 24/4/2020 27/4/2020 28/4/2020 29/4/2020 4/5/2020 5/5/2020 6/5/2020 7/5/2020 8/5/2020 11/5/2020 12/5/2020 13/5/2020 14/5/2020 15/5/2020 18/5/2020 19/5/2020 20/5/2020 Singapore Airlines Limited (C6L.SI) 3.38 3.2 3.05 3.05 3.18 3.25 3.56 3.68 3.55 3.47 3.72 3.59 3.59 3.36 3.34 3.39 3.54 3.5 3.67 3.56 3.62 3.5 3.46 3.4 3.53 3.54 8.9 8.87 9.09 9.19 6.01 6.06 4.32605 4.25559 4.29082 4.23446 4.29082 4.30491 4.19218 4.164 4.4 4.41 4.41 4.29 9.06 9.14 9.12 9.01 9.12 9.14 9.1 8.96 4 3.81 8.9 3.55 3.33 3.35 3.38 3.5 3.53 3.9 3.72 3.7 3.57 8.85 8.56 8.61 8.75 3.53 3.63 88.75 8.54 8.11 7.97 3.61 3.86 4.07 4.09 8.11 8.14 4.09 3.57 3.64 3.63 3.6 3.76 3.82 3.82 3.88 4.11 4.31 4.38 4.33 4.29 4.35 3.99 4.01 3.98 7.8 7.86 8.15 8.15 8.26 8.4 8.9 8.81 4.19 4.49 4.63 4.93 4.95 4.2 4.16 8.72 8.42 4.63 20/5/2020 21/5/2020 22/5/2020 25/5/2020 26/5/2020 27/5/2020 28/5/2020 29/5/2020 1/6/2020 2/6/2020 3/6/2020 4/6/2020 5/6/2020 9/6/2020 10/6/2020 11/6/2020 12/6/2020 15/6/2020 16/6/2020 17/6/2020 18/6/2020 19/6/2020 22/6/2020 23/6/2020 24/6/2020 26/6/2020 29/6/2020 30/6/2020 2/7/2020 37/2020 6/7/2020 7/2020 8/7/2020 97/2020 8.3 8.09 4.02 4.15 4.13 4.07 4 4.02 4.49 4.33 4.52 4.52 4.35 4.37 4.19 4.31 4.19 3.81 3.62 3.78 3.91 3.82 3.79 3.66 3.95 3.9 3.84 3.82 3.75 3.73 3.81 3.85 3.9 3.93 8.1 8.12 8.05 7.991 7.93 7.85 7.74 7.71 7.48 7.5 6.48107 6.35911 6.57689 6.43751 6.29813 66.23716 3.61 3.87 3.61 3.85 3.85 3.81 3.75 3.72 3.61 3.51 3.51 3.49 3.64 3.7 3.62 3.63 3.77 3.72 3.7 7/2020 10/7/2020 13/7/2020 14/7/2020 15/7/2020 16/7/2020 17/7/2020 20/7/2020 21/7/2020 227/2020 23/7/2020 247/2020 27/7/2020 28/7/2020 29/7/2020 30/7/2020 3.66 3.69 6.23716 5.92356 6.04551 66.09778 5.9 6.11 6.02 5.89 5.82 5.76 5.79 5.56 5.62 5.45 5.32 5.27 3.88 3.65 3.69 3.62 3.67 3.74 3.64 3.68 3.59 3.48 3.36 3.61 3.57 3.53 3.42 5.56 5.65 5.5 5.75 6.03 5.98 6.13 Cathay Pacific Airlines (0293.HK) 8.12 8.2 8.19 8.27 8.5 8.61 9.04 9.12 8.93 9.01 9.36 9.39 8.9 9.02 8.98 6.25 6.17 6.15 6.23 6.23 Date Qantas Airways Limited (QAN.AX) 1/4/2020 2/4/2020 3/4/2020 6/4/2020 7/4/2020 8/4/2020 9/4/2020 14/4/2020 15/4/2020 16/4/2020 17/4/2020 20/4/2020 21/4/2020 22/4/2020 23/4/2020 24/4/2020 27/4/2020 28/4/2020 29/4/2020 4/5/2020 5/5/2020 6/5/2020 7/5/2020 8/5/2020 11/5/2020 12/5/2020 13/5/2020 14/5/2020 15/5/2020 18/5/2020 19/5/2020 20/5/2020 Singapore Airlines Limited (C6L.SI) 3.38 3.2 3.05 3.05 3.18 3.25 3.56 3.68 3.55 3.47 3.72 3.59 3.59 3.36 3.34 3.39 3.54 3.5 3.67 3.56 3.62 3.5 3.46 3.4 3.53 3.54 8.9 8.87 9.09 9.19 6.01 6.06 4.32605 4.25559 4.29082 4.23446 4.29082 4.30491 4.19218 4.164 4.4 4.41 4.41 4.29 9.06 9.14 9.12 9.01 9.12 9.14 9.1 8.96 4 3.81 8.9 3.55 3.33 3.35 3.38 3.5 3.53 3.9 3.72 3.7 3.57 8.85 8.56 8.61 8.75 3.53 3.63 88.75 8.54 8.11 7.97 3.61 3.86 4.07 4.09 8.11 8.14 4.09 3.57 3.64 3.63 3.6 3.76 3.82 3.82 3.88 4.11 4.31 4.38 4.33 4.29 4.35 3.99 4.01 3.98 7.8 7.86 8.15 8.15 8.26 8.4 8.9 8.81 4.19 4.49 4.63 4.93 4.95 4.2 4.16 8.72 8.42 4.63 20/5/2020 21/5/2020 22/5/2020 25/5/2020 26/5/2020 27/5/2020 28/5/2020 29/5/2020 1/6/2020 2/6/2020 3/6/2020 4/6/2020 5/6/2020 9/6/2020 10/6/2020 11/6/2020 12/6/2020 15/6/2020 16/6/2020 17/6/2020 18/6/2020 19/6/2020 22/6/2020 23/6/2020 24/6/2020 26/6/2020 29/6/2020 30/6/2020 2/7/2020 37/2020 6/7/2020 7/2020 8/7/2020 97/2020 8.3 8.09 4.02 4.15 4.13 4.07 4 4.02 4.49 4.33 4.52 4.52 4.35 4.37 4.19 4.31 4.19 3.81 3.62 3.78 3.91 3.82 3.79 3.66 3.95 3.9 3.84 3.82 3.75 3.73 3.81 3.85 3.9 3.93 8.1 8.12 8.05 7.991 7.93 7.85 7.74 7.71 7.48 7.5 6.48107 6.35911 6.57689 6.43751 6.29813 66.23716 3.61 3.87 3.61 3.85 3.85 3.81 3.75 3.72 3.61 3.51 3.51 3.49 3.64 3.7 3.62 3.63 3.77 3.72 3.7 7/2020 10/7/2020 13/7/2020 14/7/2020 15/7/2020 16/7/2020 17/7/2020 20/7/2020 21/7/2020 227/2020 23/7/2020 247/2020 27/7/2020 28/7/2020 29/7/2020 30/7/2020 3.66 3.69 6.23716 5.92356 6.04551 66.09778 5.9 6.11 6.02 5.89 5.82 5.76 5.79 5.56 5.62 5.45 5.32 5.27 3.88 3.65 3.69 3.62 3.67 3.74 3.64 3.68 3.59 3.48 3.36 3.61 3.57 3.53 3.42