Excel Activity: Feasible Portfolios

Following is information for the required returns and standard deviations of returns for A, B, and C:

Stock	ri	i
A	7.0%	35.47%
B	10.0%	50.65%
C	18.0%	88.75%

The correlation coefficients for each pair are shown in the following matrix, with each cell in the matrix giving the correlation between the stock in that row and column. For example, _AB = 0.1554 is in the row for A and the column for B. Notice that the diagonal values are equal to 1 because a variable is always perfectly correlated with itself.

	A	B	C
A	1.0000	0.1554	0.1890
B	0.1554	1.0000	0.1644
C	0.1890	0.1644	1.0000

Do not round intermediate calculations. Round your answers to two decimal places.

A. Suppose a portfolio has 30% invested in A, 50% in B, and 20% in C. What are the expected return and standard deviation of the portfolio?

Expected return: 10.70 %

Standard deviation: ???? %

B. The partial model lists sixty six different combinations of portfolio weights (only six of them are shown below). For each combination of weights, find the required return and standard deviation.

wA	wB	wC	p	rP
0%	80%	20%	???? %	???? %
10%	70%	20%	???? %	???? %
30%	10%	60%	???? %	???? %
50%	20%	30%	???? %	???? %
60%	10%	30%	???? %	???? %
70%	20%	10%	???? %	???? %

C. Construct a scatter diagram showing the required returns and standard deviations already calculated. This provides a visual indicator of the feasible set. Choose the correct graph.

The correct graph is graph D

If you seek a return of 10.5%, then what is the smallest standard deviation that you must accept?

???? %

- I have post and asking this problem before, but the answer I receive wasn't correct. So now I ask for courtesy to let me post it again, and open for other to attempt to solve this problem as well.

- Please provide the excel formula for the the answer number too, I would love to understand them, please tell me if some element necessary to answer the questions is missing. Thank you so much for helping out with this.

Feasible Set of Portfolios Feasible Set of Portfolios