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Using the table created in the previous problem above, plot the opportunity set of risky assets in Excel. Then vary the correlation between stocks and
Using the table created in the previous problem 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.
Make sure to include in the Excel file submission, a description of the efficient frontier's shape as you vary the correlation.
Risk Free Rate 3% 10% 15% E(rtn) stocks Volatility stocks E(rtn) bonds Volatilty bonds Creelation Stock allocation Bond Allocation Return Risk Sharpe Ratio 0% 100% 6% 8.00% 0.3750 5% 95% 6.20% 7.82% 0.4091 10% 90% 6.40% 7.71% 0.4408 15% 85% 6.60% 7.68% 0.4689 6% 8% 0.25 20% 80% 6.80% 7.72% 0.4924 25% 75% 7.00% 7.83% 0.5108 30% 70% 7.20% 8.01% 0.5241 35% 65% 7.40% 8.26% 0.5326 40% 60% 7.60% 8.57% 0.5368 45% 55% 7.80% 8.93% 0.5374 50% 50% 8.00% 9.34% 0.5353 55% 45% 8.20% 9.79% 0.5311 60% 40% 8.40% 10.28% 0.5254 65% 35% 8.60% 10.80% 0.5187 70% 30% 8.80% 11.34% 0.5114 75% 25% 9.00% 11.91% 0.5038 80% 20% 9.20% 12.50% 0.4961 85% 15% 9.40% 13.10% 0.4885 90% 10% 9.60% 13.72% 0.4810 95% 5% 9.80% 14.36% 0.4737 100% 0% 10.00% 15.00% 0.4667
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