You are an investor with an investment horizon of one year and a certain degree of risk aversion. Your task is to determine the efficient frontier in the case of two risky securities and one risk-free (T-bill) security and select the optimal portfolio depending on your risk-aversion parameter. You need to do your work on an EXCEL SPREADSHEET!

*Note: select two risky securities and one risk-free (T-bill) security OF YOUR CHOICE.

1- Choose

• A well-diversified risky bond B represented by its E(RB) and STDB.

• A well-diversified stock fund S represented by its E(RS) and STDS.

• A T-bill with one-year maturity represented by RF. 2- Choose a correlation coefficient between B and S. 3- Make simulations on STD and E(R) of a "complete" portfolio (formed with B and S) by varying the weights allocated on B and S. 4- Construct and graph the opportunity set (feasible set) for B and S from your simulations. 5- Compute the weights of the tangent portfolio (T). 6- Compute the STDT and E (RT) of the tangent portfolio (T).

  7- Add the T-bill to your portfolio and redo step 3. 8- Repeat step 4 with the T-bill rate.

9- Choose different risk aversion parameters and determine your optimal weights in T and F and for the implied optimal portfolio compute the E(R) and STD. 10- Provide a summary of your results

THANK YOU SO MUCH, I REALLY APPRECIATE YOUR HELP :)