Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PLEASE CREATE A EFFICIENT FRONTIER GRAPH FOR QUESTION 5 USING THE GIVEN DATA. Stock Allocation Bond Allocation Return Risk Sharpe Ratio Risk free return (Rfr)

PLEASE CREATE A EFFICIENT FRONTIER GRAPH FOR QUESTION 5 USING THE GIVEN DATA.

image text in transcribed

Stock Allocation Bond Allocation Return Risk Sharpe Ratio Risk free return (Rfr) 0.03
0% 100% 6.00% 8.00% 0.38 stock return (rtn) 0.1
5% 95% 6.20% 7.82% 0.41 Standard deviation stock (SD1) 0.15
10% 90% 6.40% 7.71% 0.44 bond return E (rtn) 0.06
15% 85% 6.60% 7.68% 0.47 Standard deviation bond (SD2) 0.08
20% 80% 6.80% 7.72% 0.49 Correlation (r) 0.25
25% 75% 7.00% 7.83% 0.51
30% 70% 7.20% 8.01% 0.52
35% 65% 7.40% 8.26% 0.53
40% 60% 7.60% 8.57% 0.54
45% 55% 7.80% 8.93% 0.54
50% 50% 8.00% 9.34% 0.54
55% 45% 8.20% 9.79% 0.53
60% 40% 8.40% 10.28% 0.53
65% 35% 8.60% 10.80% 0.52
70% 30% 8.80% 11.34% 0.51
75% 25% 9.00% 11.91% 0.50
80% 20% 9.20% 12.50% 0.50
85% 15% 9.40% 13.10% 0.49
90% 10% 9.60% 13.72% 0.48
95% 5% 9.80% 14.36% 0.47
100% 0% 10.00% 15.00% 0.47
43.50% 56.50% 7.74% 8.82% 0.54
5) Using the table created in Problem #2 above, plot the opportunity set of risky assets in Excel. Then vary the correlation between stocks and bonds from + 1 to -1 and describe the changes in shape of the efficient frontier as you do so. Upload the Excel file that contains the table & graph. Also include in Excel file a description of the efficient frontier's shape as you vary the correlation. (10 pts) 5) Using the table created in Problem #2 above, plot the opportunity set of risky assets in Excel. Then vary the correlation between stocks and bonds from + 1 to -1 and describe the changes in shape of the efficient frontier as you do so. Upload the Excel file that contains the table & graph. Also include in Excel file a description of the efficient frontier's shape as you vary the correlation. (10 pts)

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

More Books

Students also viewed these Accounting questions

Question

What functions are provided by SNMP?

Answered: 1 week ago

Question

5. Understand how cultural values influence conflict behavior.

Answered: 1 week ago