Calculate monthly returns, expected (average) returns and standard deviations of returns for each of the six stocks and the market index S&P/ASX300. Calculate correlation coefficients and covariance for each pair of two stock returns, each pair of a stock and the index returns and then put the results into a the matrix. The rows and columns of the matrix must be appropriately labelled. Provide comments on the risk and returns of individual stocks in comparison with market.

THE SIX COMPANIES ARE

CSL LIMITED

AMCOR LIMITED

EVOLUTION MINING LIMITED

SEVEN WEST MEDIA LIMITED

COMMONWEALTH BANK

TELSTRA CORPORATION

Establish the portfolio opportunity set that is constructed with your selected 6 stocks by using Excel Solver (The Excel_Solver_Demo will be provided in Moodle). The opportunity set will be best presented in graphical form. Broker requirements and regulatory restrictions generally prohibit short selling for the fund. As such, it is prudent to assume that short selling is impossible in this section. Highlight the efficient set and discuss where the individual stocks lie in the graph in relation to the opportunity curve and efficient set.

Recommend one portfolio (A) to the Board of Directors with appropriate explanation, i.e., why you recommend this portfolio. Your discussion should include: a. Details of the global minimum variance portfolio (including weights and dollar amounts). b. Details of the portfolios A (including weights and dollar amounts) Note: The global minimum variance portfolio and the optimal portfolio are not allowed for your recommendation (Actually, the optimal portfolio should not appear in this section)

Any References can be added and this is the only information available

Expected Return		0.011323489	0.006417139	0.015320804	0.029503697	0.015231057	0.008357527	0.006121729
Variance		0.003050578	0.002731707	0.013662529	0.046865025	0.004957328	0.004073657	0.002617749
StD		0.055232035	0.052265735	0.116886822	0.216483313	0.070408295	0.063825205	0.051163947
Corr		0.23078486	-0.001959979	-0.174298402	0.302552397	0.480290999	0.528263606
Cov		0.000666217	-1.19739E-05	-0.004410455	0.00461157	0.002158343	0.001725071

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Monthly Returns The monthly returns of the six stocks and SPASX300 index can be calculated using the following formula Monthly Return Closing Price of Month t Closing Price of Month t1 Closing Price o... View the full answer