The table below presents the variance – covariance matrix and the…

Question Answered step-by-step The table below presents the variance – covariance matrix and the… The table below presents the variance – covariance matrix and the mean returns for six different stocks of financial institutions, based on their monthly data. Please show how formulas are used in excel    FREWMSTTJPMGSC Mean returnsFRE0.00520.00330.00150.00390.00680.0010 0.24%WM0.00330.01200.00340.00720.00630.0015 -0.89%STT0.00150.00340.00460.00580.00390.0015 0.48%JPM0.00390.00720.00580.03790.00730.0023 0.44%GS0.00680.00630.00390.00730.03890.0023 -1.46%C0.00100.00150.00150.00230.00230.0018 1.04%Calculate the Global Minimum Variance Portfolio (GMVP).Calculate the efficient portfolio, assuming the monthly risk free rate is0.45%.Draw the efficient frontier with the expected return on the vertical axis,the standard deviation on the horizontal axis, and use convex 8combinations between the GMVP and the efficient portfolio from (a) and (b), correspondingly (notice that the whole efficient frontier can be drawn from any two points on it, therefore since we know how to find the GMVP and the efficient portfolio it is enough to depict the complete efficient frontier).Repeat the same steps from question 23, but this time while the variance – covariance matrix is an equally weighted combination (this is actually the shrinkage method with Lambda = 0.5) of the sample matrix in question 23, and a simple diagonal matrix of only the variances (it means the variances along the main diagonal and ‘0’ elsewhere). Accounting Business Financial Accounting FIN 550 Share QuestionEmailCopy link Comments (0)