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 monthly stock returns.

c. (3 marks)

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

d. (2 marks)

Calculate the correlation of monthly stock returns between each pair of stocks.

e. (4 marks)

Suppose that you were to invest 65% in Apple Inc., 25% in Rio Tinto Ltd and 10% in Cathay Pacific Airlines.Calculate the portfolio expected return, variance and standard deviation.

f. (4 marks)

How would the expected return and standard deviation change if you decided to invest 20% in Rio Tinto Ltd, 25% inApple Inc. and 55% in Cathay Pacific Airlines?Explain your answers.

g. (5 marks)

Find the weights of Apple Inc., Rio Tinto Ltd and Cathay Pacific Airlines that will provide a monthly return of greater than 0.8% with the lowest level of risk. There should be a minimum weighting of 10% for each stock.

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 monthly returns.

i. (4 marks)

If the monthly risk-free rate is 0.12%, estimate the Sharpe ratio for the portfolios mentioned in parts (e), (f) and (g) and highlight the highest Sharpe ratio.