Make up a view and replace the one in Spreadsheet. Recalculate the optimal asset allocation and portfolio
Question:
Make up a view and replace the one in Spreadsheet. Recalculate the optimal asset allocation and portfolio expectedperformance.
PortfolioA 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...
er 5 and Market-Value Weights and Calculation of Baseline Forecasts Bonds Stocks Bonds 10 Stocks 0.75 0.004080 0.028900 arket 13 Coefficient of risk aversion of r 15 17 investor ariance with R0.0046 0.022695 of covariance attributed to expected retums retums Bonds Bonds0.000084 0.0000408 Stocks 23 28 Variance of OFVarR-R 0.000271 0.000023 0.000248 een view and baseline data, measur ation ot vie 33 Possibe SD 34 Variance 0.0003 0.0184 0.0009 0.0152 0.0143 0.0190 0.0148 0.0140 0.059 0.0424 0 0.0140 0.0681 05560.0643 0
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Alpha represents the difference between actual return and expected return If r of ...View the full answer
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Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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