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Ure the information below to help answer questions 1-2 Excel's solver was used to create the Minimum Variance Frontier (MVF) Portfolios 1-6 are all on

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Ure the information below to help answer questions 1-2 Excel's solver was used to create the Minimum Variance Frontier (MVF) Portfolios 1-6 are all on the MYF Portfolios 1-6 were created by weighting Stock W, Stock X, Stock Y, Stock Z Portfolios 2-6 are comer portfolios The risk free rate is 2% All return and risk figures are annualized Pomolo Relum Teal Rinke Sharpeles Stock Stod 1 8.0X16.0% 0.3333100% 0% 0% 2015.0% 17.0% 078775% 25% 0 % 3 19.04 18.04 0.94443595555 4 240 200 1.1000 osal 25 529. 250 1.08000 0 eo 32.0836 090 .83330 % O 350 25.0% 200 10.06 Son 10.09 (Asset Allocation) Which of the following statements is (are) most likely FALSE? 1. When creating this efficient frontier above, it was assumed the portfolio manager cannot short stocks IL. When finding the optimal portfolio, maximize the portfolio's return using Excel's solver 1. The optimal portfolio's Sharpe Ratio is 1.20 b) c) d) II & II e) None of the statements This question is worth 2 points (Asset Allocation) Your client's current portfolio is $6,250 Stock Wand $3,750 Stock Z. To achieve your client's retirement goals, you must increase the return of the existing portfolio by 3.0%. Using the weights in the corner portfolios, which of the following actions (I-IV) would be required II. Sell $6,250 Stock W Sell $1,750 Stock Z Buy $4,000 Stock X Buy $4,000 Stock Y IV. 1 a) b) c) d) e) I IV I, II, III, IV 2. This question is worth 2 points! (Asset Allocation) Your client's current portfolio is $6,250 Stock W and $3,750 Stock Z. To achieve your client's retirement goals, you must increase the return of the existing portfolio by 3.0%. Using the weights in the corner portfolios, which of the following actions (I-IV) would be required I. Sell $6,250 Stock W II. Sell $1,750 Stock Z III. Buy $4,000 Stock X IV. Buy $4,000 Stock Y a) I b) II c) III d) IV e) I, II, III, IV

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