Overview:In the first milestone, you prepared a client analysis. In this milestone, you will create the stock analysis and portfolio development sections of your final project.First, you must understand what you are investing in. You have to know the underlying characteristics of the investment. What type of asset is it? What type of security? How is it priced? What are the expected cash flows? Who are the typical investors and what are their typical motives? If you do not understand the answers to those questions, then the initial expectations you develop about the value and risk of the asset will be fundamentally flawed. This sets you up formis steps that can lead to underperforming your investment objectives. Second, you must be able to estimate the value of the asset. Valuation is about assessing the estimated cash flows of the asset. This is a key component ofdiscerning absolute return potential and the differences between competing assets. It has a significant influence on the third step in the process as well. The third step is developing a thesis about an asset’s expected return and the associated risk. This is accomplished by assessing your valuation estimates against the current market price and any developing economic or market dynamics that may impact your expected valuation or its pricing. The market is constantly changing, and these expectations need to be monitored on a regular basis to ensure they continue to correspond to the objectives you are trying to achieve.Finally, you must understand how the assets in a portfolio interact with one another. It is likely that you will not have just one investment, so any additional assets will impact the overall performance of the portfolio. You want to formulate a plan to add assets that, when combined together, will have the potential tomeet your objectives. Putting all of these steps together into a consistent, thorough process will position you to better meet the investment objectives laid outat the beginning.Prompt:This milestone involves creating a draft of the stock analysis and portfolio development sections of the final project.Use the providedspreadsheettocalculate your portfolio’s standard deviation.Specifically, the followingcritical elementsmust be addressed:II.Stock Analysis:In this section, you will select five stocks from the provided list and determine their values by applying an appropriate valuation modelfrom the following options: price to multiple model (earning or sales), dividend valuation model, or free cash flow model.A. Determine the value of each stock by using an appropriate model based on the characteristics provided for each stock; use each model at leastonce.B.Provide a rationale for thestock valuation methodyou chose for each stock. Cite specific information to support your decisions.C.Using the calculated valuation, the current market price, and historical performance, determine the expected return for each stock.