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Use the following capital market expectations with respect to stock and bond funds - Use Markowitz' portfolio optimization model to find the weight of
Use the following capital market expectations with respect to stock and bond funds - Use Markowitz' portfolio optimization model to find the weight of stocks (W*) and weight of bonds (W*) in the optimal risky portfolio. Er Assume Correlation = 0.50 Stocks Bonds 13% 22% Use last digit of your student ID x.01 (i.e. 000328967 means 7 x .01 = 0.07 T-Bills or 7%). If last digit of ID is "0" then use second to last number. If still "0" keeping moving up digit until you find 4% a number> "0". 10% Share your student ID #:_ THIS IS THE RETURN ON BONDS. 0% Weight of stocks in the optimal risky portfolio = W* = Weight of bonds in the optimal risky portfolio = W* = E(rp)* = p* = MUST SHOW WORK FOR CREDIT. Show either in the box below or post your excel work to the Canvas dropbox provided.
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