Finance Portfolio management -frontier of risky assets by ClassOf1

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									              Sub: Finance                                                            Topic: Portfolio management

              Question:
              Plotting a chart of the efficient frontier of risky assets.

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              Solving for the Efficient Frontier of Risky Assets

              In a world where there are no risk free assets and just these three risky assets, plot a chart of
              the efficient frontier of risky assets both in the case where short sales are permitted and
              short sales are not permitted.



              Solution:
                        Using the same method as described in 1 above, we can determine various set of
              portfolios by defining a fixed rate of Expected Return.

                        In 1 above, we include another constraint wherein we want the portfolio to generate a
              fixed rate of return (say J14 = 4.5%), using Solver again we can get another set of portfolio with
              different weights of A, B and C with different SD of the portfolio. It needs to be remembered
              that this SD arrived at using Solver (4.88%) would still be minimum for
								
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