Herrera is also interested in knowing if the college should diversify its portfolio holdings to include REITs, EAFE, and PM in its portfolio. Make a case for or against the inclusion of these alternative assets in the college's overall portfolio.

13.31 C Portfolio SD Portfolio Excess Return Panel A Standard deviation expected retures of each country Index Avets 1995 - 2012 SMLSTK 0.06514 0.01075 MEDSTK 0.05546 0.0100 LRGSTK 0.04536 0.00193 CBOND 0.01511 0.003 GROND 0.0221 0.00TL 9. REIT 0.05985 0.01021 10 PM 0.11030 0.01029 11 ENTE 0.045 0.00670 12 berat 0.0011 13 Panel Bordered Covariance Matrix 14 25 Portfolio weights % TIM 16 SMLSTK MEDSTK LRGSTK CBOND GROND REIT 17 SMLSTK 0.00022330 0.00336610 0002 0.0000404 11 41.5 MEDSTK 00336610 000300178 0.002191 0.00031105 0.000000 19 25.75% LROSTK 0.000210 000215 0.002017 07 -0.00 2012.7% COOND 0.0001 0.000 0.000 0.00022718 00019000 23 78 82% GBOND 24 0.00 -0.000 0.00077 22 1331% REIT 0.00231831 0.002071 0.00100221 0.00042557 -0.000 23 1.6% PM 0.0000015 0.0000 0.0000713 0.000000 0.0001748 24 -54% CAFE COM 0.0002415 0.001 0.00022013 0.000000 25 1.0000 0.00006 0.000000 000014 0.00010 26 EM 100 27 Risk Prem 6.78% 28 Sed Dev 2.14% 29 272 10 malas din kolla 12 Cell AIT AM These are portfolio weight. You can initial valuesitrarily as long assum u Cell CIS -A17, and so on the portfolio weights in column Aare copied to row 33 4 Cell AS SUMIA17A24 25 Cell CISSUMPRODUCTISA176A24.C17C4 16 Cell 19 tough Copied from a note the software 37 Cell 26 ED SUM PRODUCT ADTA49CA SCU1) 30 Cella JUMPRODUCTATAMSCASCHI) S0512 Cells SUMCS2SPOS 40 Calle Share 21 0.00231831 0.0074 000145021 0.0000 -0.00090956 0.00356545 0.0016320 0.001500 0.00012 TESN 54N ENFE 0.00300157 0.0026 0.00130487 0.0001 0.0008783 DOWN 000 0.0002013 0.000170 . 0.00163326 0.001SBON 0.01212018 0.00151001 0 DOIS 0.00710512 000001 -0.00020 Panac Various points along the dentro porte 000 94 940 NO NO ON NRES MO Miverpool ON 0. 1A 20 WEGO 10 Q wool ME IND 0 NO SO WO MEZ 210 2011 wa 23 oso SIS SON 12.01 MPRE MET MERE MO M orginal 44 EU JORN es Rose de e shop SUBTK MEDSTK NUROBTK NOM mon S2 GBOND SEIT 0.00 PM 000 MINE JO CAL sminGALOS son NAN WIP COIN 24 220 M 26 w ME am 1010 19 220 OS -0. NCROND WO NUE NRS ON NIE 140 M90 WN 129 TEM 10 22 4 100 2 -0 40 11 w NO N10 MV MO MO MO NO w 20.01 11 12 NECH WW ME SEN . ar MINI . 41 Spl Expected bid De 0.41 0. 1 ON L 16 1 w NUT WREO MET WO NE WHO ME NE STE KUT NT n! The cu SD LAMI Area 0.00014 BON 0.34 1 NOVO WEB OM DAN 1 ON w VOTO 2 ON 2. 10 Q7 07 Efficient Frontier Min. ad RP-1% -11 1.200 100 Optimal Risky Porfolio (1.995,0 RON Efficient portfolio En Risk Prem: Std Dev: Sharpe: SMLSTK MEDSTK LRGSTK CBOND GBOND REIT PM EAFE 0.0 1.00% 0.76% 2.78% 27.39% 5.43% 40.53% 24.86% -8.96% 76.35% 12.68% 1.55% -52.45% Eilent portfolio 12.781.00 Monthly Expected Retur 0.00 im Poole Global portfolio (1.43.0.51 Tangency portfolio S.D. x) Expected return 1.99 O NON 0.30 Global minimum variance portfolio S.D.) Expected return(y) 0.OON 0.00 LOON 250 3.00 1.45% 0.54% LSON Standard Deviation 13.31 C Portfolio SD Portfolio Excess Return Panel A Standard deviation expected retures of each country Index Avets 1995 - 2012 SMLSTK 0.06514 0.01075 MEDSTK 0.05546 0.0100 LRGSTK 0.04536 0.00193 CBOND 0.01511 0.003 GROND 0.0221 0.00TL 9. REIT 0.05985 0.01021 10 PM 0.11030 0.01029 11 ENTE 0.045 0.00670 12 berat 0.0011 13 Panel Bordered Covariance Matrix 14 25 Portfolio weights % TIM 16 SMLSTK MEDSTK LRGSTK CBOND GROND REIT 17 SMLSTK 0.00022330 0.00336610 0002 0.0000404 11 41.5 MEDSTK 00336610 000300178 0.002191 0.00031105 0.000000 19 25.75% LROSTK 0.000210 000215 0.002017 07 -0.00 2012.7% COOND 0.0001 0.000 0.000 0.00022718 00019000 23 78 82% GBOND 24 0.00 -0.000 0.00077 22 1331% REIT 0.00231831 0.002071 0.00100221 0.00042557 -0.000 23 1.6% PM 0.0000015 0.0000 0.0000713 0.000000 0.0001748 24 -54% CAFE COM 0.0002415 0.001 0.00022013 0.000000 25 1.0000 0.00006 0.000000 000014 0.00010 26 EM 100 27 Risk Prem 6.78% 28 Sed Dev 2.14% 29 272 10 malas din kolla 12 Cell AIT AM These are portfolio weight. You can initial valuesitrarily as long assum u Cell CIS -A17, and so on the portfolio weights in column Aare copied to row 33 4 Cell AS SUMIA17A24 25 Cell CISSUMPRODUCTISA176A24.C17C4 16 Cell 19 tough Copied from a note the software 37 Cell 26 ED SUM PRODUCT ADTA49CA SCU1) 30 Cella JUMPRODUCTATAMSCASCHI) S0512 Cells SUMCS2SPOS 40 Calle Share 21 0.00231831 0.0074 000145021 0.0000 -0.00090956 0.00356545 0.0016320 0.001500 0.00012 TESN 54N ENFE 0.00300157 0.0026 0.00130487 0.0001 0.0008783 DOWN 000 0.0002013 0.000170 . 0.00163326 0.001SBON 0.01212018 0.00151001 0 DOIS 0.00710512 000001 -0.00020 Panac Various points along the dentro porte 000 94 940 NO NO ON NRES MO Miverpool ON 0. 1A 20 WEGO 10 Q wool ME IND 0 NO SO WO MEZ 210 2011 wa 23 oso SIS SON 12.01 MPRE MET MERE MO M orginal 44 EU JORN es Rose de e shop SUBTK MEDSTK NUROBTK NOM mon S2 GBOND SEIT 0.00 PM 000 MINE JO CAL sminGALOS son NAN WIP COIN 24 220 M 26 w ME am 1010 19 220 OS -0. NCROND WO NUE NRS ON NIE 140 M90 WN 129 TEM 10 22 4 100 2 -0 40 11 w NO N10 MV MO MO MO NO w 20.01 11 12 NECH WW ME SEN . ar MINI . 41 Spl Expected bid De 0.41 0. 1 ON L 16 1 w NUT WREO MET WO NE WHO ME NE STE KUT NT n! The cu SD LAMI Area 0.00014 BON 0.34 1 NOVO WEB OM DAN 1 ON w VOTO 2 ON 2. 10 Q7 07 Efficient Frontier Min. ad RP-1% -11 1.200 100 Optimal Risky Porfolio (1.995,0 RON Efficient portfolio En Risk Prem: Std Dev: Sharpe: SMLSTK MEDSTK LRGSTK CBOND GBOND REIT PM EAFE 0.0 1.00% 0.76% 2.78% 27.39% 5.43% 40.53% 24.86% -8.96% 76.35% 12.68% 1.55% -52.45% Eilent portfolio 12.781.00 Monthly Expected Retur 0.00 im Poole Global portfolio (1.43.0.51 Tangency portfolio S.D. x) Expected return 1.99 O NON 0.30 Global minimum variance portfolio S.D.) Expected return(y) 0.OON 0.00 LOON 250 3.00 1.45% 0.54% LSON Standard Deviation