please supply work in excel formulas only, thank you.

RISK AND RETURN Assume that you recently g uated with a major in finance. You just landed a job as a financial planner with Merrill Finch Inc., a large financial services corporation. Your first assignment is to invest $100,000 for a client. Because the funds are to be invested in a business at the end of 1 year, you have been instructed to plan for a 1 year holding period. Further, your boss has restricted you to the investment alternatives in the following table, shown with their probabilities and associated outcomes. (For now disregard the items at the bottom of the data; you will fill in the blanks later.) o+ Returns on Alternative Investments Estimated Rate of Return State of the US. Market Two-Stock Probablity esu 30% (29.5%) 30 (9.5) 30 275 30 275 ge, -13% t52 08 30 425 245% 35%" 105 (165) (.0) 05 (5385 (20.0) 235 a95%) (5.5) 7.5 Below average Average Above average 0.4 0.2 35.5 113 1.2% 112 188 15.2 Cv 9.8 050 088 Note The estimated returns of U.S. Rubber do not always move in the same direction as the overall economy. For example, when the economy is below average, consumers purchase fewer tires than they would if the economy was stronger. However, if the economy is in a flat-out recession,a large number of consumers who were planning to purchase a new car may choose to wait and instead purchase new tires for the car they currently own. Under these circumstances, we would expect U.S. Rubber's stock price to be higher if there is a recession than if the economy is just below average stocks; you can invest in that portfolio and thus obtain average stock market results. Given the situation described, answer the following questions: a. 1. Why is the T-bill's return independent of the state of the economy? Do T-bills promise a completely risk-free return? Explain 2. Why are High Tech's returns expected to move with the economy, whereas Collections's are expected to move counter to the economy? b. Calculate the expected rate of return on each alternative, and fill in the blanks on the row for t in the previous table. FS FA 8 8 3 6 4 5