Question
You must form a portfolio that includes NVIDIA Corporation (NVDA) and General Electric Company (GE) using the monthly returns of the securities from January 1,
You must form a portfolio that includes NVIDIA Corporation (NVDA) and General Electric Company (GE) using the monthly returns of the securities from January 1, 2010 through January 1, 2022 (inclusive). Part 2a: Find the minimum variance portfolio. You must provide the proportions of each security in the portfolio, the expected return and the standard deviation of the portfolio. NOTE: If you are using Solver, be sure to include a screenshot of Solver. Part 2b: Find the components of the portfolio regression formed in 2a. That is, find the alpha, beta, and r-squared of the portfolio in relation to the market (use the monthly returns from VFINX). Interpret each component. Part 2c: Is the regression of 2b significant at the 5% significance level Explain. Part 2d: Can you increase the diversification effect of the portfolio by increasing the number of stocks in the portfolio? To answer, add stocks (number of stocks and proportions of stocks are up to you) to the portfolio and recalculate the r-squared
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