Question
Please see below and provide excel calculations...thank you! You currently have $1,000,000. You want to invest it in the following three assets: 10-year US Treasury
Please see below and provide excel calculations...thank you!
You currently have $1,000,000. You want to invest it in the following three assets: 10-year US Treasury bond with coupon rate 4.5%, Blandy and Gourmange stocks, which have the following historical annual returns over 30 years:
average annual return for Blandy- 7.10%; and Gourmange - 9.20%, with standard deviation of Blandy - 24% and Gourmange - 37% and finally a Correlation 0.19.
Your goal is to have the expected annual return of 7.6% with a minimum portfolio risk. How much money should you allocate to these three assets? What is the minimum portfolio risk (i.e., the standard deviation)?
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