The table below summarizes the monthly returns for five stocks over the last two years.

(a) Develop a model in Excel to determine the stock allocations that minimize risk subject to maintaining an average monthly return of at least 2%. What is the minimum variance? Show screenshots of all the formulas and solver.

(b) Update the model (in a separate worksheet) to determine the portfolio allocation that maximizes return, subject to maintaining a variance of at most 0.002. What is the optimal monthly return? Show screenshots of all the formulas and solver.

(c) In a separate worksheet, plot the efficient frontier (return versus risk) by varying the return between 1% and 3.5% in increments of 0.5%, re-running your model of Part (a), and noting the resultant risk level as measured by the standard deviation of the portfolio. Explain clearly what information the efficient frontier provides.

Stock In addition, the covariance values for the five stocks are displayed in the following table 3 2 3 Stock 0.0110 0.0032 0 0.0002 Stock In addition, the covariance values for the five stocks are displayed in the following table 3 2 3 Stock 0.0110 0.0032 0 0.0002