Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

INstead of posting not enough details, Ask what you want to know... For Alliant Energy (LNT) - Analysis based on End of Last Month. This

INstead of posting not enough details, Ask what you want to know...

For Alliant Energy (LNT) - Analysis based on End of Last Month.

This is a complete written report of your portfolio formation in a Word file. Your historical data and relevant derived values in tables can be pasted from your previous calculations in the Excel file. Please provide explanations of all calculations and the justifications in the Word format. Also, make sure to paste all underlying Excel formulae that you used for calculations in the Word file. 1. Provide once again the data that you presented in answering part 2 of professional assignment 2. 2. Calculate the mean, variance, and the standard deviation of each securitys annual rate of return. 3. Calculate the correlation coefficient between every possible pair of securities annual rates of return. 4. Choose percentages of your initial investment that you want to allocate amongst the five (5) securities (weights in the portfolio). Create embedded formulae which generate statistical properties of the portfolio upon insertion of the weights. Observe the mean, the standard deviation, and the CV of the annual rate of return of the portfolio. 5. Find the combination of the weights that minimizes CV of the portfolio. How the CV of the optimal portfolio compares with the CVs of its constituents. What is the expected rate of return and standard deviation of the rate of return of the portfolio? 6. Choose different values within the range of the standard deviation of the portfolio, and for each chosen value locate the corresponding point on the efficient frontier by finding the weights that maximize the expected rate of return of the portfolio. Subsequently, construct the efficient frontier of your portfolio. 7. Assume that you initially invested $1,000,000 in the portfolio and that the distribution of the annual rate of return of the portfolio is normal. What is the distribution of the return of the portfolio 20 years after its formation? Provide the graph of the distribution of the return of the portfolio.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Managerial Accounting

Authors: Peter Brewer, Ray Garrison, Eric Noreen

9th Edition

1265672008, 978-1265672003

More Books

Students also viewed these Accounting questions

Question

What would you do if the bullies were in your classes?

Answered: 1 week ago

Question

=+Could you create an interactive game on the website?

Answered: 1 week ago