A B C D E

1 Epsilon Delta Capital

2 Modeling Risk and Realities =SUMPROD
3
4 Govt Muni. Corp. Consumer
5 Product Group Bonds Bonds Bonds Loans
6 Expected Return, % 1.5 3.0 4.5 8.0
7 Quality Score 5.0 3.0 2.0 1.0
8
9 Minimum Quality Score 2.50
10 Minimum Investment Amount ($ millions) 20.00
11 Maximum Investment Fraction 0.50
12 Minimum Fraction of Government Bonds 0.25
13
14 Investment Amount ($ millions) 41.67 0.00 20.83 62.50
15 =B14/$I$14
16 Investment Fractions, % 0.33 0.00 0.17 0.50
17 =B9
18 Risk Score Requirement 2.50 => 2.50
19 Fraction Allocated to Government Bonds 0.67 => 0.25
20
21 =SUMPRODUCT(B16:E16,B7:E7) =B14/SUM(B14:D14) =B12
22
 F G H I
1
2
UMPRODUCT(B14:E14,B6:E6)/100
3
4 Total Expected
5 Return (in $ millions)
6 6.56
7
8
9 =SUM(B14:E14)
10
11
12
13 Total Invested
14 125.00 = 125.00
15
16
17
=B9
18
19
20
21
22
Minimum Quality Score Optimal Total Expected Return ($ millions)
2.5 6.56

Results for Alternative Quality Score Values

Minimum Quality Score Optimal Total Expected Return ($ millions)
2.00 6.91
2.10 6.91
2.20 6.84
2.30 6.63
2.40 6.43
2.50 6.23
2.60 6.02
2.70 5.82
2.80 5.62
2.90 5.42
3.00 5.21
3.10 5.01
3.20 4.81
3.30 4.60
3.40 4.40
3.50 4.17
Investment Amounts ($ millions)

65.00
60.00
55.00
50.00
45.00
40.00
35.00
30.00
25.00
20.00
2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0 3.1 3.2 3.3 3.4 3.

Minimum Quality Score

G ($ mil l i ons ) M ($ mi l l i ons ) C ($ mi l l i ons ) L ($ mi l l i ons )

 G ($ millions) M ($ millions) C ($ millions) L ($ millions)
41.67 0.00 20.83 62.50

O ptmal Total Expected Return ($ millions)

G ($ millions) M ($ millions) C ($ millions) L ($ millions) 7.00

20.00 20.00 22.50 62.50 6.50

20.00 20.00 22.50 62.50
6.00
22.50 20.00 20.00 62.50
25.63 20.00 20.00 59.37 5.50
28.75 20.00 20.00 56.25
5.00
31.88 20.00 20.00 53.12
35.00 20.00 20.00 50.00 4.50
38.13 20.00 20.00 46.87
4.00
41.25 20.00 20.00 43.75 2.0 2
44.38 20.00 20.00 40.62
47.50 20.00 20.00 37.50
50.63 20.00 20.00 34.37
53.75 20.00 20.00 31.25
56.88 20.00 20.00 28.12
60.00 20.00 20.00 25.00
62.50 21.25 20.00 21.25

3.0 3.1 3.2 3.3 3.4 3.5

re

L ($ mi l l i ons )
O ptmal Total Expected Return ($ millions)

7.00

6.50

6.00

5.50

5.00

4.50

4.00
2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0 3.1 3.2 3.3 3.4 3.5

Minimum Quality Score