Using the Solver tool, which is an Excel add-on, apply the following: The objective is the Sharpe ratio, which you want the Solver tool to maximize. The variable cells are the weights of the stock positions. Name: _______________________________________ - 3 - The constraint is that the sum of the weights is equal to one; for this you need to use the cell Sum.

What are the weights of the individual stocks according to this optimization? b) What is the expected return and standard deviation of the portfolio? c) Compare the Sharpe ratio of the portfolio to the Sharpe ratios of the individual stocks. Use the expected returns, the given risk-free rate and the standard deviation from the data to answer this question.