This assignment is to be done in Excel.
You are interested in forming a portfolio with Stock S and Bond B. Stock S has an expected return of 14% and a standard deviation of returns of 30%. Bond B has an expected return of 8% and a standard deviation of returns of 15%. The correlation coefficient of the returns of S and B is 0.22. The risk-free rate of return is 5%.
Using increments of 1 percentage point, fill in the template posted and plot both efficient frontiers (with vs. without the risk-free asset.) When plotting the line for the frontier with the risk-free asset, use a range from 0 to 30 for the X values.
Please do not forget the important reminders below:
1. The weight in the bond (Wb) for the minimum-variance portfolio needs to be inserted numerically within the Wb column.
2. The weight in the bond (Wb) for the maximum-Sharpe-Ratio portfolio does not need to be inserted numerically in the Wb column, but you can do so if you would like.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more