Question: Al B C D E F Expected return of the portfolio is the sum Portfolio expected return can be calculated Expected Return =[WR; Where w;

Al B C D E F Expected return of the portfolio is the sum Portfolio expected return can be calculated Expected Return =[WR; Where w; and r; are the weights and return Portfolio variance can be calculated as folld Portfolio variance = WA*o'(RA) + W =*o'(Rs) 10 Where wa and we are weights of assets A ar PA,8 is the correlation between asset A and Given the following data: 13 10-year annual return Standard deviation Bledsoe Large Company Stock Fund (A) 0.1073 0.2673 15 Bledsoe Bond Fund (B 0.0804 0.1034 16 Risk free rate (historic) 0.036 17 18 Correlation (PA,B) 0.16 19 20 21 Weight of stock fund Portfolio E(R Portfolio standard Deviation SORT((C22*$E$14)^2+((1- 22 =C22*SD$14+(1-C22)*$D$15 SORT((C22*SE$14)^2+((1-C22)*SE$15)^2+2*C22*(1-C22)*$D$18*SE$14*SE$15) C22)*$E$15)^2+2*C22*(1- 10.1 =C23*SD$14+(1-C23)*SD$15 =SORT( (C23*SES14)^2+((1-C23)*SES15)^2+2*C23*(1-C23)*SD$18*SE$14*SE$15) 24 0.2 =C24*SD$14+(1-C24)*SD$15 =SORT((C24*SES14)^2+((1-C24)*SES15)^2+2*C24*(1-C24)*SD$18*SE$14*SE$15) 25 0.3 =C25*$D$14+(1-C25)*$D$15 =SQRT((C25*SE$14)^2+((1-C25)*SE$15)^2+2*C25*(1-C25)*$D$18*SE$14*SE$15) 26 10.4 =C26*SD$14+(1-C26)*SD$15 SORT((C26*SES14)^2+((1-C26)*SES15)^2+2*C26*(1-C26)*SD$18*SE$14*SE$15) 27 0.5 =C27*SD$14+(1-C27)*SD$15 =SORT((C27*SE$14)^2+((1-C27)*SE$15)^2+2*C27*(1-C27)*SD$18*SE$14*SE$15) 28 0.6 =C28*$D$14+(1-C28)*$D$15 =SQRT((C28*SE$14)^2+((1-C28)*SE$15)^2+2*C28*(1-C28)*$D$18*$E$14*SE$15) 29 0.7 =C29*SD$14+(1-C29)*SD$15 =SORT( (C29*SES14)^2+((1-C29)*SES15)^2+2*C29*(1-C29)*SDS18*SE$14*SE$15) 0.8 =C30*SD$14+(1-C30)*$D$15 =SORT((C30*SE$14)^2+((1-C30)*SE$15)^2+2*C30*(1-C30)*SD$18*SE$14*SE$15) 0.9 =C31*$D$14+(1-C31)*$D$15 =SORT((C31*SE$14)^2+((1-C31)*SE$15)^2+2*C31*(1-C31)*$D$18*SE$14*SE$15) C32*$D$14+(1-C32)*$D$15 =SORT((C32*SE$14)^2+((1-C32)*SE$15)^2+2*C32*(1-C32)*$D$18*SE$14*SE$15) Dominant portfolio: Weight of stock fund 0.1727 36 Weight of bond fund =1-D35 =1-D35 37 Standard Deviation =SORT((D35*SE$14)^2+(D36*SE$15)^2+2*D35*D36*SD$18*SE$14*SE$15) =SORT((D35*$E$14)^2+(D36*$E$15)^2+2*D35*D36*$D$18*$E$14*$E$15) 38 Expected Return =D35*$D$14+D36*$D$15 =D35*$D$14+D36*$D$15 39 Minimum Variance Portfolio: For minimum variance portfolio, 41 Weight of Bledsoe Large Cap Stock Fund =(E15^2-D18*E14*E15)/(E14^2+E15^2-2*D18*E14*E15) -(E15^2-D18*[14*E15)/(E14^2+E15^2-2*D18*[14*[15) WA=(OB - PUACB) / (CA + 08-20GAGB) 42 Weight of Bledsoe Bond Fund 1-D41 =1-D4 13 Expected Return =D41*SD$14+D42*SD$15 =D41*$D$14+D42*$D$15 44 Variance =(D41*SE$14)^2+(D42*SE$15)^2+2*D41*D42*$D$18*SE$14*SE$15 =(D41*$E$14)^2+(D42*$E$15)^2+2*D41*D42*$D$18*$E$14*$E$15 45 Standard Deviation =SQRT(D44) =SORT(D44) 46

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