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Olio AB COLISIS cent investment in investment B (e.g., $10,000 invested in A, and $10,000 Rate of Return Year A B. C D AB AC
Olio AB COLISIS cent investment in investment B (e.g., $10,000 invested in A, and $10,000 Rate of Return Year A B. C D AB AC AD EXHIBIT 5.2 Realized Returns for Four Individual Investments and Three Portfolios -10% 30% -25% 15% 10% -17.5% 2.5% 1 o 20 -5 10 10 -2.5 5.0 2 10 10 15 o 10 12. 5.0 3 20 o 35 25 10 4 27.5 22.5 30 -10 5 55 35 10 42.5 32.5 10.0% 10.0% Rate of return Standard deviation 15.0% 17.0% 10.0% 12.5% 13.5% 31.6% 13.5% 0.0% 23.7% 13.3% 15.8% 15.8% PROBLEM 12 Refer to Table 5.2 in the Gapenski text a. Construct an equal weighted (50/50) portfolio of Investments B and C. What is the realized rate of return, standard deviation, and correlation coefficient of the portfolio? Explain your results. b. Construct an equal weighted (50/50) portfolio of Investments C and D. What is the realized rate of return, standard deviation, and correlation coefficient of the portfolio? Explain your results. Note: use the =CORREL(array1,array2) function to calculate the r (or correlation coefficient) of each portfolio
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