1. Based on your return objectives and risk tolerance, select five indexes for your portfolio (3 equity indices + 2 bond indices) for the period of 1999-2018. In the Data and Calculations Tab, Enter the full names of your chosen five investments and their annual returns into the gray box. a. Calculate their means, variances, standard deviations, and reward-to-risk ratios. Use Excel formulae to present your calculations in the beige areas. The Summary Statistics of your five investments should automatically appear in the Summary tab. b. Populate both the correlation and covariance matrices with computations. 2. Set up this spreadsheet with formulae in beige areas to calculate statistics for the equally-weighted portfolio. 3. Experiment with three different allocations for your portfolio: a. Equally-weighted portfolio - 20% in each index. Enter 20% next to each index in the box labeled Portfolio Weights. Then transfer the portfolio statistics in the Portfolio Statistics box into the "Results" section of the Portfolio Statistics Table under Equal Weights Portfolio in the Summary Tab. b. Your weights - Choose the weights (percentage of your wealth) you want to invest in the 5 indexes, based on your personal return objectives and risk tolerance (no borrowing, and the weights should add to 100%). Enter your personal portfolio weights next to each index in the box labeled Portfolio Weights. Then transfer the portfolio statistics that are automatically calculated in the Portfolio Statistics box into the "Results" section under Your Weights Portfolio of the Portfolio Statistics Table (you can use Copy Paste Special Values). c. Explain (in the space in the Summary Tab) why you chose your 5 indexes and your personal portfolio weights. Everyone's will be different! d. Optimization - use Excel Solver to find the combination of index weights that will maximize your reward-to-risk ratio (no borrowing, and the weights should add to 100%). Run Solver to find the optimal weights for a portfolio of the 5 indexes (NOTE: Some indexes may end up with 0% weights in the optimal portfolio, and that is OK). Transfer the weights that are calculated into the "Portfolio Weights" section. Then transfer the portfolio statistics that are automatically calculated in the Portfolio Statistics box into the "Results" section under the Optimal Weights Portfolio of the Portfolio Statistics Table. 4. Graph (in the space in the Summary Tab) the mean/standard deviations using a scatter plot. Include each of the 5 indexes you chose; the equal-weighted portfolio; your weight portfolio; and optimized portfolio. Label the points (NOTE: you must label to get full credit). Identify the point that shows the best return per unit of risk. 5. Discuss the results of the three experiments (in the space in the Summary Tab). Would you want to change your weights? Why or why not? (There is no single correct answer, but it has to make sense).