If you can answer the following questions I will send the data: 1) Calculate the mean, standard deviation, skewness, and excess kurtosis of the returns oneach portfolio. Comment on the degree to which these returns either appear or do notappear to be normally distributed. Calculate the annualized Sharpe Ratio for eachportfolio.1 Assuming a long investment in one of these portfolios, do you see any reasonto prefer the Sortino Ratio as a performance ratio over the Sharpe Ratio? Briefly discuss.If so, calculate the Sortino Ratio for each of these portfolios and annualize the estimatesin the same way that you did for the Sharpe Ratio. Based only on either the Sharpe Ratioor the Sortino Ratio, which of these portfolios would you prefer to own and why?2) Calculate Value at Risk and Expected Shortfall for each portfolio at the 5% and 1%levelsAssuming normality for the portfolio returnsUsing the empirical method (i.e., making no distributional assumption about thereturn generating process for each portfolio).Compare your answers from parts (i) and (ii) above. What do these answers tell youabout whether (or not) your portfolio’s returns appear to be normally distributed. Usingyour answers to part (ii), revisit your preferences over the three portfolios in problem (1)based only on their, respective, Sharpe or Sortino Ratio. Do you still maintain those samepreferences? What (if anything) additional do you learn from your estimates in part (ii)?3) Your VaR estimates from parts (i) and (ii) in problem (2) are based on 1,277 trading dayreturns. Over the next 1,277 trading days, how many times would you expect the actualportfolio returns to fall below these VaR estimates? Suppose for, say, the equal-weightedportfolio, over the next 1,277 trading days, the number of times that the actual portfolioreturn falls below your VaR estimate from part (i) in problem (2) at the 1% confidencelevel exceeds that expectation. What would you, then, conclude? Suppose, again, for theequal-weighted portfolio, the number of times over the next 1,277 trading days that theactual portfolio return falls below your VaR estimate from part (ii) in problem (2) at the1% confidence level exceeds that expectation. What would you, then, conclude?1 To do so, first calculate the given portfolio’s Sharpe Ratio assuming the risk-free rate to be approximately zero.Next, scale this estimate by √252, where 252 is the approximate number of trading days in a year.2In problems (4) and (5) below, briefly describe what you would do; you do not have toactually do it.4) The Chief Risk Officer for the SMIF portfolio wants a sensitivity analysis performed onthe expected shortfall estimate you calculated in part (ii) of problem (2)? Specifically, he(or she) took Investments and recalls the example from class where ES is estimated theday before and the day after the stock market crash of ’87. How might you conduct sucha sensitivity analysis using more current events?5) The Chief Risk Officer of the SMIF portfolio also wants to know what securities withinthe portfolio contribute the most to the portfolio’s Expected Shortfall estimate. Howmight you answer this question?