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The monthly excess return of 6 stocks are given in the excel file (See the attached excel file). Using the information given to you in

The monthly excess return of 6 stocks are given in the excel file (See the attached excel file). Using the information given to you in the excel, create an optimal portfolio that comprised of a passive portfolio of a market index and an active portfolio that is made up of these 6 stocks. If you make any assumption, please clearly state your assumption and why you made such assumption and its justification. Verify whether or not the assumptions underlying Index Models are met. Also, calculate the beta and the Sharpe ratio of the portfolio. In all of your calculation, please make sure to use the formulas (not just numbers) in your excel file, so that I can evaluate your work. Cells with just number without any formulas won't receive any credit. image text in transcribed

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