Question
You are trying to form portfolios based on the following information about Stocks A,B,C and D Expected Return of Stock A = 5%; Stock B
You are trying to form portfolios based on the following information about Stocks A,B,C and D
Expected Return of Stock A = 5%; Stock B = 8%; Stock C = 15%; Stock D = 21%
The Standard Deviation of Stock A = 12%; Stock B = 18%; Stock C = 32%; Stock D = 40%
The Correlation between A,B = - 0.05; A,C = 0.10, A,D = 0.07; B,C = 0.20; B,D = 0.50; C,D = 0.35
The Risk Free Rate is 4.0%
Using Excel, do/answer the following:
- Assume an investor has a risk aversion factor of 3. If they had $100,000, how much should they put in the risky (optimal) portfolio calculated above?
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Raising Venture Capital
Authors: Rupert Pearce, Simon Barnes
1st Edition
0470027576, 978-0470027578
