The risk index of an investment can be obtained by taking the absolute values of percentage changes

Question:

The risk index of an investment can be obtained by taking the absolute values of percentage changes in the value of the investment for each year and averaging them. Suppose you are trying to determine the percentages of your money to invest in T-bills, gold, and stocks. The file S14_95.xlsx lists the annual returns (percentage changes in value) for these investments for the years 1968 through 1988. Let the risk index of a be the weighted average of the risk indices of these investments, where the weights are the fractions of the assigned to the investments. Suppose that the amount of each investment must be between 20% and 50% of the total invested. You would like the risk index of your to equal 0.15, and your goal is to maximize the on your Determine the maximum on your subject to the stated constraints. Use the average return earned by each investment during the years 1968 through 1988 as your estimate of

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The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...