a. Download up to 10 years of monthly returns for 10 different stocks and enter them into

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a. Download up to 10 years of monthly returns for 10 different stocks and enter them into the Excel program. Enter some plausible figures for the expected return on each stock and find the set of efficient portfolios. Assume that you cannot borrow or lend.

b. How does the possibility of short sales improve the choices open to the investor?


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Use the Beyond the Page feature to access an Excel program for calculating the efficient frontier. (We are grateful to Darien Huang for providing us with a copy of this program.) Excel functions SLOPE, STDEV, COVAR, and CORREL are especially useful for answering the following questions.

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...
Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
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Principles of Corporate Finance

ISBN: 978-1260013900

13th edition

Authors: Richard Brealey, Stewart Myers, Franklin Allen

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