Expert Q&A Done In this problem, we will build an active portfolio, that is, a portfolio consisting of individually selected stocks to complement our passive investments. To do this, create an Excel worksheet. Use the following instructions with a market risk premium of 5%. Consider the following annualized information regarding a selection of six stocks (Apple Inc, Amazon.com Inc, Intuitive Surgical Inc, Target Corp, Walmart Inc, and Exxon Mobil Corp) and the S&P 500 that we have obtained from a regression analysis: SD Het S at Does Camper SAMZN SISRG STGT SWMT SVOM 0.1701 1.000 1701 0. 0200.341 3006 035546 _02336 02721 SO ON 0.2761 1 361033 0.3296 .600 .000 02163 164 1600 Find the covariance matrix according to the index model, where the covariance between two assets is defined as. (Hint: You can find the from the above table if you compute the covariance of the index with itself because.) Create a forecast of for each company, that is, the return in percent you anticipate in excess over the return expected through its in the coming year. Example: If the of the company were to be l, you'd expect an excess return of 5% in the absence of However, if you anticipated that the company's stock was going to realize an excess return of 4% or 6%, then its would be -1% or +1%, respectively. This forecast can just be a guess for this problem! Expert Q&A Done In this problem, we will build an active portfolio, that is, a portfolio consisting of individually selected stocks to complement our passive investments. To do this, create an Excel worksheet. Use the following instructions with a market risk premium of 5%. Consider the following annualized information regarding a selection of six stocks (Apple Inc, Amazon.com Inc, Intuitive Surgical Inc, Target Corp, Walmart Inc, and Exxon Mobil Corp) and the S&P 500 that we have obtained from a regression analysis: SD Het S at Does Camper SAMZN SISRG STGT SWMT SVOM 0.1701 1.000 1701 0. 0200.341 3006 035546 _02336 02721 SO ON 0.2761 1 361033 0.3296 .600 .000 02163 164 1600 Find the covariance matrix according to the index model, where the covariance between two assets is defined as. (Hint: You can find the from the above table if you compute the covariance of the index with itself because.) Create a forecast of for each company, that is, the return in percent you anticipate in excess over the return expected through its in the coming year. Example: If the of the company were to be l, you'd expect an excess return of 5% in the absence of However, if you anticipated that the company's stock was going to realize an excess return of 4% or 6%, then its would be -1% or +1%, respectively. This forecast can just be a guess for this