Question 1 Question 1: (5 points) Answer the following questions with the monthly adjusted close price data of your choice of three stocks or ETFs that will be downloaded from Yahoo Finance. A. (1...

Please see attached file. there are 2 main questions and some sub questions for each.


Question 1 Question 1: (5 points) Answer the following questions with the monthly adjusted close price data of your choice of three stocks or ETFs that will be downloaded from Yahoo Finance. A. (1 point) Calculate the monthly returns using adjusted close price of each stock or ETF B. (1 point) Calculate the monthly and annual expected returns and standard deviations for each stock or ETF in designated cells C. (1 point) if the annual risk-free rate is equal to 1. 5% , calculate the Sharpe ratio for each stock or ETF. If you would invest all your money in one of these stocks or ETFs which one would you choose ? Why? Please write your answer for part C in this cell. D. (1 point) Calculate the monthly and annual expected return, standard deviation and sharpe ratio of a portfolio that invests 25% in Stock/ETF 1, 25% in Stock/ETF 2 and 50% in Stock/ETF 3. According to your calculations will you invest all your money in one of these stocks or ETFs or the portfolio? Why? Please write your answer for part D in this cell. E. (1 point) If you invest 30% in risk-free asset and 70% in the risky portfolio above what will be expected retun and standard deviation of your compelete portfolio? Stock/ETF 1Stock/ETF 2Stock/ETF 3Stock/ETF 1Stock/ETF 2Stock/ETF 3Portfolio DateAdj CloseAdj CloseAdj CloseReturnReturnReturnReturn 10/1/19 11/1/19 12/1/19 1/1/20 2/1/20 3/1/20 4/1/20 5/1/20 6/1/20 7/1/20 8/1/20 9/1/20 10/1/20 11/1/20 12/1/20 1/1/21 2/1/21 3/1/21 4/1/21 5/1/21 6/1/21 7/1/21 8/1/21 9/1/21 10/1/21 11/1/21 Monthly Expected Return Monthly Standard Deviation Annual Expected Return Annual Standard Deviation Annual Risk-free Rate0.015 Sharpe Ratio Annual Expected Return of Complete Portfolio Annual Standard Deviation of Complete Portfolio Question 2 Question 2: (2.5 points ) Suppose that you just short sold 10 shares of TESLA stock for $1221 per share on Nov 5, 2021. A. (0.5 points) Construct the balance sheet that corresponds to the transaction described if the initial margin requirement is 55%. AssetsLiabilities and Equity Cash (Proceeds from the sale of stock)Short Position(100 shares) Cash (Margin requirement)Equity Total Assets Total Liabilities and Equity B. (0.5 points) Now suppose the price of TESLA decreases to $811 per share after one year and no dividends are paid out during this period. Construct the balance sheet after the price decrease. What is your remaining margin percentage? AssetsLiabilities and Equity Cash (Proceeds from the sale of stock)Short Position(100 shares) Cash (Margin requirement)Equity Total Assets Total Liabilities and Equity Remaining Margin Percentage C. (0.5 points) Calculate your rate of return from this short sale. Rate of Return D. (1 point) Please explain the term short queeze? Please write your answer for part D in this cell.