Question: Using the table created in the previous problem above, plot the opportunity set of risky assets in Excel. Then vary the correlation between stocks and

Using the table created in the previous problem above, plot the opportunity set of risky assets in Excel. Then vary the correlation between stocks and bonds from + 1 to -1 and describe the changes in shape of the efficient frontier as you do so. Upload the Excel file that contains the table & graph. Make sure to include in the Excel file submission, a description of the efficient frontier's shape as you vary the correlation.

Using the table created in the previous problem above, plot the opportunity

Stock Allocation 0% 5% 10% 15% 20% Bond Allocation 100% 95% 90% 85% 80% Risk 8.00% 7.82% 7.71% 7.68% 7.72% 7.83% 8.01% 8.26% Sharpe Ratio 0.3750 0.4091 0.4408 0.4689 0.4924 0.5108 0.5241 0.5326 0.5368 0.5374 0.5353 25% 75% 70% 30% 35% 65% 40% 60% 55% 45% 50% Return 6.00% 6.20% 6.40% 6.60% 6.80% 7.00% 7.20% 7.40% 7.60% 7.80% 8.00% 8.20% 8.40% 8.60% 8.80% 9.00% 9.20% 9.40% 9.60% 9.80% 10.00% 7.74% 50% 0.5311 55% 60% 45% 40% 0.5254 65% 35% 0.5187 30% 25% 20% 15% 70% 75% 80% 85% 90% 95% 100% 43.50% 8.57% 8.93% 9.34% 9.79% 10.28% 10.80% 11.34% 11.91% 12.50% 13.10% 13.72% 14.36% 15.00% 8.82% 0.5114 0.5038 0.4961 0.4885 0.4810 0.4737 0.4667 0.5376 10% 5% 0% 56.50% Risk-free rate = Eartn) stocks = Volatility stocks = E(rtn) bonds = Volatility bonds = Correlation between stocks & bonds = 3.0% 10% 15% 6% 8% 0.25 Stock Allocation 0% 5% 10% 15% 20% Bond Allocation 100% 95% 90% 85% 80% Risk 8.00% 7.82% 7.71% 7.68% 7.72% 7.83% 8.01% 8.26% Sharpe Ratio 0.3750 0.4091 0.4408 0.4689 0.4924 0.5108 0.5241 0.5326 0.5368 0.5374 0.5353 25% 75% 70% 30% 35% 65% 40% 60% 55% 45% 50% Return 6.00% 6.20% 6.40% 6.60% 6.80% 7.00% 7.20% 7.40% 7.60% 7.80% 8.00% 8.20% 8.40% 8.60% 8.80% 9.00% 9.20% 9.40% 9.60% 9.80% 10.00% 7.74% 50% 0.5311 55% 60% 45% 40% 0.5254 65% 35% 0.5187 30% 25% 20% 15% 70% 75% 80% 85% 90% 95% 100% 43.50% 8.57% 8.93% 9.34% 9.79% 10.28% 10.80% 11.34% 11.91% 12.50% 13.10% 13.72% 14.36% 15.00% 8.82% 0.5114 0.5038 0.4961 0.4885 0.4810 0.4737 0.4667 0.5376 10% 5% 0% 56.50% Risk-free rate = Eartn) stocks = Volatility stocks = E(rtn) bonds = Volatility bonds = Correlation between stocks & bonds = 3.0% 10% 15% 6% 8% 0.25

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