Question
Chapter 6 Mini-Case: Risk, Return, and the Capital Assets Pricing Model Review the mini-case in Chapter 6 of your text and respond to the following:
Chapter 6 Mini-Case: Risk, Return, and the Capital Assets Pricing Model Review the mini-case in Chapter 6 of your text and respond to the following: Andrea Corbridge is considering forming a portfolio consisting of Kalama Corp. and Adelphia Technologies. The two corporations have a correlation of -0.1789, and their expected returns and standard deviations are as follows:
| Kalama Corp. | Adelphia Technologies | |
| Expected return (%) | 14.86 | 23.11 |
| Standard Deviation (%) | 23.36 | 31.89 |
Calculate the frontier for all possible investment combinations of Kalama Corp. and Adelphia Technologies (from 0% to 100%, in 1% increments). Determine the optimal risky portfolio if the risk-free rate is 3%.
*I have the answers already I need to know how to find the answers. Below I added some of the answers, how do I find them so I can show my work!?
| Weight in Kalama | Weight in Adelphia | SDportfolio | ERportfolio |
| 100% | 0% | 23.36% | 14.86% |
| 99% | 1% | 23.07% | 14.94% |
| 98% | 2% | 22.79% | 15.03% |
| 97% | 3% | 22.51% | 15.11% |
| 96% | 4% | 22.23% | 15.19% |
| 95% | 5% | 21.96% | 15.27% |
| 94% | 6% | 21.70% | 15.36% |
| 93% | 7% | 21.44% | 15.44% |
| 92% | 8% | 21.18% | 15.52% |
| 91% | 9% | 20.94% | 15.60% |
| 90% | 10% | 20.69% | 15.69% |
| 89% | 11% | 20.46% | 15.77% |
| 88% | 12% | 20.23% | 15.85% |
| 87% | 13% | 20.00% | 15.93% |
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Capital As Power
Authors: Jonathan Nitzan, Shimshon Bichler
1st Edition
0415496802, 978-0415496803
