A Expected Return 2 Variance 81 Standard Deviation 9 25.0 20.0 15.0 10.0 5.0 0.0 0...

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A Expected Return 2 Variance 81 Standard Deviation 9 25.0 20.0 15.0 10.0 5.0 0.0 0 Standard deviation Asset Correlation -0.68 0.2 0.4 0.6 W(a) B 10 400 20 Portfolio 0.8 1 1.2 E(r) 12.00 10.00 8.00 6.00 4.00 2.00 0.00 H W(a) 0.69 Variance Standard Deviation Expected Value 0.00 Portfolio 5.00 A W(b) 0.31 24.64 5.0 4.5 10.00 15.00 Standard deviaton INSTRUCTIONS: Put the needed formulas into cells i5 - 17. Make sure they depend on the data in cells d3 e7 and the weights in h5 and i5. Then answer the questions below. 20.00 B 25.00 1) When correlation between the assets is perfectly positive the set of possible investments is a 2) When correlation between the assets is perfectly negative the set of possible investments is a 3) When correlation between the assets is zero the set of possible investments is a 4) When correlation between the assets is .5 the set of possible investments is a 5) When the amount invested in asset A is 100% the risk of the portfolio is 6) Decreasing the amount invested in asset A more ofter 7) When correlation between the assets is -1 what is the best amount to invest in asset B? 8) When correlation between the assets is 1 what is the best amount to invest in asset B? A Expected Return 2 Variance 81 Standard Deviation 9 25.0 20.0 15.0 10.0 5.0 0.0 0 Standard deviation Asset Correlation -0.68 0.2 0.4 0.6 W(a) B 10 400 20 Portfolio 0.8 1 1.2 E(r) 12.00 10.00 8.00 6.00 4.00 2.00 0.00 H W(a) 0.69 Variance Standard Deviation Expected Value 0.00 Portfolio 5.00 A W(b) 0.31 24.64 5.0 4.5 10.00 15.00 Standard deviaton INSTRUCTIONS: Put the needed formulas into cells i5 - 17. Make sure they depend on the data in cells d3 e7 and the weights in h5 and i5. Then answer the questions below. 20.00 B 25.00 1) When correlation between the assets is perfectly positive the set of possible investments is a 2) When correlation between the assets is perfectly negative the set of possible investments is a 3) When correlation between the assets is zero the set of possible investments is a 4) When correlation between the assets is .5 the set of possible investments is a 5) When the amount invested in asset A is 100% the risk of the portfolio is 6) Decreasing the amount invested in asset A more ofter 7) When correlation between the assets is -1 what is the best amount to invest in asset B? 8) When correlation between the assets is 1 what is the best amount to invest in asset B? A Expected Return 2 Variance 81 Standard Deviation 9 25.0 20.0 15.0 10.0 5.0 0.0 0 Standard deviation Asset Correlation -0.68 0.2 0.4 0.6 W(a) B 10 400 20 Portfolio 0.8 1 1.2 E(r) 12.00 10.00 8.00 6.00 4.00 2.00 0.00 H W(a) 0.69 Variance Standard Deviation Expected Value 0.00 Portfolio 5.00 A W(b) 0.31 24.64 5.0 4.5 10.00 15.00 Standard deviaton INSTRUCTIONS: Put the needed formulas into cells i5 - 17. Make sure they depend on the data in cells d3 e7 and the weights in h5 and i5. Then answer the questions below. 20.00 B 25.00 1) When correlation between the assets is perfectly positive the set of possible investments is a 2) When correlation between the assets is perfectly negative the set of possible investments is a 3) When correlation between the assets is zero the set of possible investments is a 4) When correlation between the assets is .5 the set of possible investments is a 5) When the amount invested in asset A is 100% the risk of the portfolio is 6) Decreasing the amount invested in asset A more ofter 7) When correlation between the assets is -1 what is the best amount to invest in asset B? 8) When correlation between the assets is 1 what is the best amount to invest in asset B?

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