Answered step by step
Verified Expert Solution
Question
1 Approved Answer
RETURNS Month Stock1 Stock2 Stock3 1 0.0616 0.0649 0.12745 2 -0.003 0.098 0.08696 3 0.2208 -0.124 0.0976 4 0.0186 0.001 0.18978 5 -0.107 0.0866 -0.01841
RETURNS | ||||
Month | Stock1 | Stock2 | Stock3 | |
1 | 0.0616 | 0.0649 | 0.12745 | |
2 | -0.003 | 0.098 | 0.08696 | |
3 | 0.2208 | -0.124 | 0.0976 | |
4 | 0.0186 | 0.001 | 0.18978 | |
5 | -0.107 | 0.0866 | -0.01841 | |
6 | -0.038 | -0.046 | -0.14875 | |
7 | -0.061 | 0.001 | 0.01471 | |
8 | 0.1173 | -0.033 | 0.2971 | |
9 | -0.117 | -0.061 | 0.0905 | |
10 | -0.026 | 0.0824 | -0.09744 | |
11 | -0.081 | -0.141 | -0.0625 | |
12 | 0.163 | 0.0636 | 0.12242 | |
13 | 0.0191 | 0.0689 | 0.2 | |
14 | 0.0785 | 0.0455 | 0.12613 | |
15 | 0.0116 | 0.023 | 0.0528 | |
16 | -0.046 | 0.1255 | 0.04943 | |
17 | -0.053 | 0.0757 | 0.00725 | |
18 | 0.0671 | -0.11 | -0.11065 | |
19 | 0.0299 | 0.0307 | 0.05668 | |
20 | 0.0095 | -0.127 | -0.06897 | |
21 | 0.0231 | 0.0803 | 0.1121 |
5) Create potfolio weight table | |||
Portfolio No. | Weight 1 | Weight 2 | Weight3 |
1 | 0.00% | 0% | 100% |
2 | 0.00% | 20% | 80% |
3 | 0.00% | 40% | 60% |
4 | 0.00% | 60% | 40% |
5 | 0.00% | 80% | 20% |
6 | 0.00% | 100% | 0% |
7 | 20.00% | 0% | 80% |
8 | 20.00% | 20% | 60% |
9 | 20.00% | 40% | 40% |
10 | 20.00% | 60% | 20% |
11 | 20.00% | 80% | 0% |
12 | 40.00% | 0% | 60% |
13 | 40.00% | 20% | 40% |
14 | 40.00% | 40% | 20% |
15 | 40.00% | 60% | 0% |
16 | 60.00% | 0% | 40% |
17 | 60.00% | 20% | 20% |
18 | 60.00% | 40% | 0% |
19 | 80.00% | 0% | 20% |
20 | 80.00% | 20% | 0% |
21 | 100.00% | 0% | 0% |
Standard deviation of each stock
Stock1 | Stock2 | Stock3 |
7.21% | 7.61% | 11.01% |
now create columns for
- Portfolio return
- Portfolio risk
- Find the feasible set.
- Find the efficient set
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started