Optimal Portfolio Selection

12/11/2021
9:30-10:45

Introduction:
 A portfolio contains various securities, so this decision can be viewed as equivalent to selecting an

optimal portfolio from a set of probable portfolios.

 This is also referred to as portfolio selection problem.
 In deciding about where to invest, the investor should estimate the expected returns on various

securities under consideration and then invest in the one with the highest expected returns.
 At the same time the investor should also consider the uncertainty attached with the realization of

the return.

Concept of Indifference Curves:

 The main substance in portfolio theory is to find an efficient frontier or locus of possible portfolio

opportunities.
 After determining this locus, the next question that arises is, how should investors select the most

suitable option?
 The most appropriate way to know about the best option on the efficient frontier is to assess the

satisfaction an investor receives from the investment opportunities.

 The risk-return trade-off on any portfolio determines an investor’s perception towards that portfolio.

It depends on how the risk of a portfolio affects the investor’s preference.

 Indifference curves or utility functions represent an investor’s preference for risk and return and can
be drawn on a two-dimensional figure, where the horizontal axis indicates risk as measured by
standard deviation (denoted by σp) and the vertical axis indicates benefit measured by the expected
return (denoted by rp).

 Indifference Curves for a Risk Averse Investor

 Each curve represents equal satisfaction along its length.
 Higher curves indicate a more desirable situation attached to it compared to the lower indifference
curves.
 Each curved line indicates one indifference curve for the investor and represents all combinations of
the portfolio that provide the investor with a given level of desirability.
 The figure depicted above shows the indifference curves in increasing order of desirability.
 The investor with the indifference curves in the above figure would find portfolios A and B equally
desirable, even though they have different expected returns and standard deviations.
 This happens because both the portfolios lie on the same indifference curve I2.
 Portfolio B has a higher standard deviation (18 percent) than portfolio A (12 percent) and is,
therefore, less desirable on that dimension.
 However, exactly offsetting this loss in desirability is the gain in desirability provided by the higher
expected returns of B (11 percent) compared to A (8 percent).
 This proves that all portfolios resting on a given individual indifference curve are equally desirable to
the investor.
 This important feature of the indifference curves implies that two indifference curves cannot
intersect.
 Since most investors would expect more return for additional risk consumed, indifference curve will
always be positively sloped.
 In contrast to risk-averse investors, a set of indifference curves for risk-loving investors will have
negative sloping and be skewed towards the origin.
 Indifference Curves for Different Types of Risk-Averse Investors

 The degree of slope associated with indifference curves will indicate the degree of risk aversion for
any chosen investor.
  The comparison between an aggressive and a conservative investor is shown in the above figure.
 The conservative investors will require substantial increase in return for assuming small increase in
risk.
 On the other hand, aggressive investors may be satisfied with small increase in returns for accepting
the same increase in risk.
 Although differences may occur in the slope of indifference curves, they are assumed to be positive
sloping for most rational investors.
 Lastly, it is important to note that there can be an infinite number of indifference curves for an
investor.
 Therefore, it will be always possible to plot an indifference curve between the two given indifference
curves.

How does an investor determine what his/her indifference curves will look like?
 The indifference curve for each investor will be unique.
 One possible method to determine the indifference curve involves presenting the investor with a set

of hypothetical portfolios, along with their expected returns and standard deviations.
 After this, he/she would be asked to choose the most desirable portfolio.
 After the choice is made, the shape and locations of the investor’s indifference curves can be

estimated.
 Here, it is expected that the investor would have acted as if he/she has indifference curves in making

this choice, even though indifference curves would not have been explicitly used.
Efficient Set Theorem:
 An infinite number of portfolios can be formed from a set of N securities.
 There are infinite number of possible portfolios that could be purchased.
 Now the question that arises is does the investor need to evaluate all these portfolios. Fortunately,

the answer is ‘no’.

 The key to why the investor needs to look at only a subset of the available portfolios lies in the

efficient set theorem, which states that

a. All investors will choose their optimal portfolio from the set of portfolios that
b. offer maximum expected returns for varying levels of risks,
c. offer minimum risk for varying levels of expected returns.
d. All the sets of the portfolios satisfying these two conditions are known as the efficient sets or
efficient frontiers.
The Feasible Set
 The following figure represents the location of the feasible set, also known as the opportunity set,

from which the efficient set can be identified.

 The feasible set simply represents all portfolios that could be formed from a group of N securities.
 That is, all possible portfolios that could be constructed from the N securities lie either on or within

the boundary of the feasible set.

 The points denoted as K, L, M, N and O in the figure are examples of such portfolios.
 Normally, this set will have an umbrella shape.
 The exact shape of the feasible set depends on the particular securities involved, it may be more to

the right or left, or higher or lower, or flatter or thinner than shown in the figure.
 However, the shape of the feasible set, except in the unique situations, looks almost similar to what

appears in the figure.

 The efficient set can now be traced by applying the efficient set theorem to this feasible set.
 First, the set of the portfolios that satisfy the first condition of the theorem should be located.
 From the above figure, it is quite clear that there is no portfolio offering less risk than portfolio N.
 This is because if a vertical line was drawn through N, there would be no point in the feasible set that
was to the left of the line.
 Again there is no portfolio offering more risk than portfolio L.
 This is because if a vertical line was drawn through L, there would be no point in the feasible set to
the right of the line.
 Thus, the set of portfolios giving maximum expected returns for different levels of risk is the set of
portfolios lying on the western boundary of the feasible set between points M and L.

 Now, coming to the second criterion of the efficient set theorem, there is no portfolio offering an
expected return greater than portfolio M, because no point in the feasible set lies above a horizontal
line going through M.
 Similarly, there is no portfolio offering a lower expected return than portfolio K, because no point in
the feasible set lies below a horizontal line going through K.
 Thus, the set of the portfolios offering minimum risk for varying levels of the expected return is the
set of portfolios lying on the western boundary of the feasible set between points K and M.
 As we know that both the conditions have to be met in order to identify the efficient set, it can be
seen that only those portfolios lying on the boundary between points N and M do so.
  Therefore, these portfolios form the efficient set, and it is from this set of efficient portfolios that the
investor will choose his/her optimal portfolio. Rest of the other feasible portfolios are inefficient
portfolios and should be avoided.

Optimal Portfolio Selection:

 The next question that arises is how will the investor select an optimal portfolio?
 An investor should first draw his efficient set of portfolios and plot the indifference curves on this

figure and then proceed to choose the portfolio that is on the indifference curves, which will have
minimum risk for the required level of return.
 This portfolio will correspond to the point where an indifference curve is just tangent to the efficient

set.
 This can be seen from the figure that this is portfolio O on indifference curve I2.
 Although the investor will prefer a portfolio on I3, no such feasible asset exists as there is no contact

of the indifference curve with the efficient set.

 With regard to I1, there are several portfolios that the investor could choose from (for example, P).
 However, the figure shows that portfolio O dominates such portfolios because it is on the

indifference curve that is further north.

 Point O is the only point which is on the efficient frontier and also on one of the indifference curves.
 In other words, at point O, the indifference curve is tangent to the efficient set frontier.
 For highly risk-averse and slightly risk-averse investors, the position of the indifference or preference

curves will change and accordingly they will choose their optimum portfolio.
Selecting an Optimal Portfolio
Portfolio Selection for a Highly Risk-Averse Investor
Portfolio Selection for a Slightly Risk-Averse Investor
Optimal Portfolio Selection Using Simultaneous Equations:

 From the variance-covariance matrix, we develop equations for each security.

𝑅 − 𝑅 = 𝑍 𝜎 + 𝑍 𝜎 +⋯+𝑍 𝜎 +⋯+𝑍 𝜎 +𝑍 𝜎
 Variance-Covariance Matrix:

Security 1 2 3 . . . N
1 𝜎 𝜎 𝜎
2 𝜎 𝜎 𝜎
3 𝜎 𝜎 𝜎
.
.
.
N 𝜎 𝜎 𝜎 𝜎
 We have one equation like this for each value of 'i'. Thus the solution involves solving the following
system of simultaneous equations.

𝑅 −𝑅 =𝑍 𝜎 +𝑍 𝜎 +𝑍 𝜎 + ⋯+ 𝑍 𝜎
𝑅 − 𝑅 = 𝑍 𝜎 +𝑍 𝜎 +𝑍 𝜎 +⋯+𝑍 𝜎
𝑅 − 𝑅 = 𝑍 𝜎 +𝑍 𝜎 + 𝑍 𝜎 +⋯+𝑍 𝜎
⋮
⋮
𝑅 − 𝑅 = 𝑍 𝜎 + 𝑍 𝜎 + 𝑍 𝜎 + ⋯+ 𝑍 𝜎

 We can obtain an optimum portfolio by solving a system of simultaneous equations.

 The solution of the system of simultaneous equations allows us to trace out the full efficient frontier.
 The Zs are proportional to the optimum amount to invest in each security. To determine the
optimum amount to invest, we first solve the equations for the Zs.
 Note that there are N equations (one for each security) and N unknowns (the 𝑍 for each security).
 Then the optimum proportion to invest in stock k is 𝑋 , where

X =𝑍 𝑍
Objective Function:

 The portfolio problem can be formulated as follows:

Maximize
𝑅 −𝑅
𝜃=
𝜎

subject to a constraint

𝑋 =1

 The portfolio problem can be of four types subjected to short sales, riskless lending and borrowing.

1. Short sales are allowed and riskless lending and borrowing is possible
o We use the standard objective function to maximize the excess returns per unit of risk considering

the presence of risk-free assets, where funds are borrowed at risk-free rate and invested in risky
assets (in addition to the funds already invested in market portfolio).
2. Short sales are allowed but riskless lending or borrowing is not permitted
o We use the standard objective function to maximize the excess returns per unit of risk, where 𝑅

can be retained to compute weights or treat it as zero mathematically.

3. Short sales are disallowed but riskless lending and borrowing exists
o We use the standard objective function with an additional constraint, where the negative weights

computed shall be ignored and the total amount is invested in positive weight assets on
proportionate basis.

Maximize
𝑅 −𝑅
𝜃=
𝜎

subject to constraints

(1) 𝑋 =1

(2) 𝑋 ≥ 0 for all 'i'

4. Neither short sales nor riskless lending and borrowing is allowed
o An efficient set is determined by minimizing the risk for any level of expected return. If we specify

the return at some level and minimize risk, we have one point on the efficient frontier. Thus, to get
one point on the efficient frontier, we minimize risk subject to the return being some level plus the
restriction that the sum of the proportions invested in each security is 1 and that all securities have
positive or zero investment. This yields the following problem:

Minimize

𝑋 𝜎 + 𝑋𝑋𝜎

subject to

(1) 𝑋 =1

(2) (𝑋 𝑅 ) = 𝑅

(3) 𝑋 ≥ 0, i = 1,…,N
Short sales allowed with riskless lending and borrowing:
Consider three securities: Colonel Motors with expected return of 14% and standard deviation of return of
6%, Separated Edison with average return of
8% and standard deviation of return of 3%, and Unique Oil with mean return of 20% and standard
deviation of return of 15%. Furthermore, assume that the correlation coefficient between Colonel Motors
and Separated Edison is 0.5, between Colonel Motors and Unique Oil is 0.2, and between Separated Edison
and Unique Oil is 0.4. Finally, assume that the riskless lending and borrowing rate is 5%.

Solution:
𝑅 −𝑅 =𝑍 𝜎 +𝑍 𝜎 +𝑍 𝜎
𝑅 −𝑅 =𝑍 𝜎 +𝑍 𝜎 +𝑍 𝜎
𝑅 −𝑅 =𝑍 𝜎 +𝑍 𝜎 +𝑍 𝜎

Variance-Covariance Matrix:

Colonel Motors (1) Separated Edison (2) Unique Oil (3)

Colonel Motors (1) 36 9 18
Separated Edison (2) 9 9 18
Unique Oil (3) 18 18 225
Simultaneous equations:

14-5 = 36𝑍 + (0.5)(6)(3)𝑍 + (0.2)(6)(15)𝑍

8-5 = (0.5)(6)(3)𝑍 + 9𝑍 + (0.4)(3)(15)𝑍
20-5 = (0.2)(6)(15)𝑍 + (0.4)(3)(15)𝑍 + 225𝑍

Simplifying, we get
9 = 36𝑍 + 9𝑍 + 18𝑍
3 = 9𝑍 + 9𝑍 + 18𝑍
15 = 18𝑍 + 18𝑍 + 225𝑍

Step-1: Solve equations 1&2 (We will get 𝑍 value)

Step-2: Solve equations 2&3 (We will get 𝑍 value)
Step-3: Substituting 𝑍 & 𝑍 values in any equation, we get 𝑍 value.

The solution to this system of simultaneous equations is

14
𝑍 = = 0.22222
63
1
𝑍 = = 0.01587
63
3
𝑍 = = 0.04761
63
So, the summation of all 𝑍 values is

18
𝑍 = = 0.28571
63

The proportion to invest in each security is

X =𝑍 𝑍

14
𝑋 = = 0.7777 (𝑜𝑟)77.77%
18
1
𝑋 = = 0.0555 (𝑜𝑟)5.56%
18
3
𝑋 = = 0.1666 (𝑜𝑟)16.66%
18

The expected return on the portfolio is

14 1 3
𝑅 = (14) + (8) + (20) = 14.67%
18 18 18
The variance of the portfolio returns is

14 1 3 14 1 14 3
𝜎 = (36) + (9) + (225) + 2 (6)(3)(0.5) + 2 (6)(15)(0.2)
18 18 18 18 18 18 18
1 3
+2 (3)(15)(0.4)
18 18

𝜎 = 33.83%

Portfolio Standard Deviation=sqrt(33.83) = 5.8163%

Slope = (14.67-5)/5.8163=1.6626
Assume analysts provide the following types of information. Assume short sales (standard definition)
are allowed. What is the optimum portfolio if the lending and borrowing rate is 5%?

Security Mean Return Standard Deviation

A 10 4
B 12 10
C 18 14

Covariance Matrix:

B C
A 20 40
B 70
Solution:
Variance-Covariance Matrix:

A B C
A 16 20 40
B 20 100 70
C 40 70 196

10-5 = 16𝑍 + 20𝑍 + 40𝑍

12-5 = 20𝑍 + 100𝑍 + 70𝑍
18-5 = 40𝑍 + 70𝑍 + 196𝑍

𝑍 = 0.292831
𝑍 = 0.009118
𝑍 = 0.003309

𝑋 = 0.95929 (95.929%)
𝑋 = 0.02987 (2.987%)
𝑋 = 0.01084 (1.084%)

The optimum portfolio has a mean return of 10.146% and a standard deviation of 4.106%.
Lintner's definition of short sales:
 Lintner (1965) has advocated an alternative definition of short sales, one that is more realistic.
 He assumes correctly that when an investor sells stock short, cash is not received but rather is

held as collateral.
 Furthermore, the investor must put up an additional amount of cash equal to the amount of stock

he or she sells short.

 The investor generally does not receive any compensation (interest) on these funds.
 However, if the investor is a broker-dealer, interest can be earned on both the money put up and

the money received from the short sale of securities.

 This leads to the constraint ∑|X | = 1 and leaves all other equations unchanged.

Maximize
𝑅 −𝑅
𝜃=
𝜎

subject to a constraint

|𝑋 | = 1
Given the following information, what is the optimum portfolio if the lending and borrowing rate is
6%, 8%, or 10%? Assume the Lintner definition of short sales.

Security Mean Return Standard Deviation

A 11 2
B 14 6
C 17 9

Covariance Matrix:

B C
A 10 4
B 30
Solution:
Variance-Covariance Matrix:
A B C

A 4 10 4
B 10 36 30
C 4 30 81

11 - 𝑅 = 4𝑍 + 10𝑍 + 4𝑍
14 - 𝑅 = 10𝑍 + 36𝑍 + 30𝑍
17 - 𝑅 = 4𝑍 + 30𝑍 + 81𝑍

The optimum portfolio solutions using Lintner short sales and the given values for 𝑅 are:
𝑅 = 6% 𝑅 = 8% 𝑅 = 10%
𝑍 3.510067 1.852348 0.194631
𝑍 −1.043624 −0.526845 −0.010070
𝑍 0.348993 0.214765 0.080537
𝑋 0.715950 0.714100 0.682350
𝑋 −0.212870 −0.203100 −0.035290
𝑋 0.711800 0.082790 0.282350
Tangent (Optimum) Portfolio Mean Return 6.105% 6.419% 11.812%
Tangent (Optimum) Portfolio Standard Deviation 0.737% 0.802% 2.971%
Optimal Portfolio Selection Using Sharpe's Optimization Model:
 The construction of the optimal portfolio would be greatly facilitated, and the ability of the

portfolio managers and security analysts to relate to the construction of the optimal portfolios
greatly simplified if a single number measures the desirability of inclusion of a stock in the
optimal portfolio.
 If any person is willing to accept the standard form of the single-index model as describing the

co-movement between the securities, the justification of any stock in the optimal portfolio is
directly related to its excess return-to-beta ratio.
 Excess return is the difference between the expected return on the stock and the risk-free rate of

interest such as rate of return on the government securities.

 The excess return-to beta ratio measures the additional return on a stock (excess return over the

risk-free rate) per unit of non-diversifiable risk.

 This ratio gets an easy interpretation and acceptance by security analysts and portfolio

managers, because they are interested to think in terms of the relationship between potential
rewards and risk.
 The numerator of this ratio of excess return-to-beta contains the extra return over the risk-free

rate.
 The denominator is the measurement of the non-diversifiable risk that we are subject to by

holding risky assets rather than riskless assets.

 Excess returns to beta ratio =
Where,
𝑅 = the expected return on stock i
𝑅 = the return on a riskless asset
𝛽 = the expected change in the rate of return on stock i associated with a 1% change in the
market return.

 If the stocks are ranked by excess return-to-beta (from highest to lowest), ranking represents
the desirability of any stock’s inclusion in the portfolio.
 This implies that if a particular stock with a specific ratio of (𝑅 − 𝑅 )/𝛽 is included in the
optimal portfolio, all stocks with a higher ratio will also be included.
 On the other hand, if a stock with a particular (𝑅 − 𝑅 )/𝛽 is excluded from an optimal portfolio,
all stocks with a lower ratio will be excluded.
 When the single-index model is assumed to represent the covariance structure of security
returns, then a stock is included or excluded, depending only on the size of its excess return-to-
beta ratio.
 The number of stocks to be selected depends on a unique cut-off rate which ensures that all
stocks with higher ratios of (𝑅 − 𝑅 )/𝛽 will be included and all stocks with lower ratios should
be excluded. We will denote this cut-off rate by 𝐶 ∗ .
 The following steps are necessary for determining which stocks are included in the optimum
portfolio:

1. Calculate the excess return-to-beta ratio for each stock under consideration and rank them from
highest to lowest.

2. After ranking the securities, the next step is to find out a cut-off point with the use of the
following formula:

(𝑅 − 𝑅 )𝛽
𝜎 ∑
𝜎
𝐶 =
𝛽
1+𝜎 ∑
𝜎
Where
𝜎 = Variance in the market index.
𝜎 = Variance of stock’s movement that is not associated with movement of the market index.
This is the stock’s unsystematic risk.
𝑅 = Expected return on stock j.
𝑅 = Risk-free rate of return.
𝛽 = Beta of the stock j.
 3. The optimal portfolio consists of investing in all stocks for which (𝑅 − 𝑅 )/𝛽 is greater than a
particular cut-off point 𝐶 ∗ .

Constructing the Optimal Portfolio:

 Once the cut-off rate is determined, we know which security will figure in the optimal portfolio.
 The next step is to calculate the proportion to be invested in each security.
 The proportion invested in each security is:

X =𝑍 𝑍

Where

𝛽 𝑅 −𝑅
𝑍 = − 𝐶∗
𝜎 𝛽
Illustration:
From the following data for 10 securities show the workings for optimal portfolio selection using
sharpe's optimization model. Consider risk-free rate as 8% and variance of market returns as 25%.

Security No. Mean Return Beta Unsystematic Risk

1 20 1.2 20
2 14 1.0 30
3 12 2.0 40
4 16 0.9 20
5 24 1.1 15
6 18 1.1 50
7 19 0.8 16
8 13 1.3 25
9 11 1.4 30
10 9 1.6 10
Solution:

Security No. Mean Return Beta Unsystematic Excess Returns Excess returns to beta Rank
Risk ratio
1 20 1.2 20 12 10.00 3
2 14 1.0 30 6 6.00 6
3 12 2.0 40 4 2.00 9
4 16 0.9 20 8 8.89 5
5 24 1.1 15 16 14.55 1
6 18 1.1 50 10 9.09 4
7 19 0.8 16 11 13.75 2
8 13 1.3 25 5 3.85 7
9 11 1.4 30 3 2.14 8
10 9 1.6 10 1 0.63 10
Ranking:
Descending order Ranking
14.55 1
13.75 2
10.00 3
9.09 4
8.89 5
6.00 6
3.85 7
2.14 8
2.00 9
0.63 10
 Short Short Standard Lintner's
sales sales definition definition
not allowed
allowed

Rank Security Beta Unsystematic Excess Excess 𝑅 −𝑅 𝛽] 𝛽 𝑅 −𝑅 𝛽] 𝛽 𝑪𝒊 𝒁𝒊 𝑿𝒊 𝒁𝒊 𝑿𝒊 𝑿𝒊

No. Risk Returns returns 𝜎 𝜎 𝜎 𝜎
to beta
ratio

1 5 1.1 15 16 14.55 1.173 0.08067 1.173 0.08067 9.7238 0.2801 0.6494 0.7103 0.9159 0.2559

2 7 0.8 16 11 13.75 0.550 0.04000 1.723 0.12067 10.7261 0.1512 0.3506 0.4445 0.5732 0.1601

3 1 1.2 20 12 10.00 0.720 0.07200 2.443 0.19267 10.5014 0.3084 0.3977 0.1111

4 6 1.1 50 10 9.09 0.220 0.02420 2.663 0.21687 10.3685 0.0931 0.1200 0.0335

5 4 0.9 20 8 8.89 0.360 0.04050 3.023 0.25737 10.1670 0.1813 0.2338 0.0653

6 2 1.0 30 6 6.00 0.200 0.03333 3.223 0.29070 9.7470 0.0380 0.0490 0.0137

7 8 1.3 25 5 3.85 0.260 0.06760 3.483 0.35830 8.7455 -0.0527 -0.0680 -0.0190

8 9 1.4 30 3 2.14 0.140 0.06533 3.623 0.42363 7.8151 -0.1268 -0.1635 -0.0457

9 3 2.0 40 4 2.00 0.200 0.10000 3.823 0.52363 6.7834 -0.1430 -0.1844 -0.0515

10 10 1.6 10 1 0.63 0.160 0.25600 3.983 0.77963 4.8599 -0.6776 -0.8738 -0.2441

1.0000 1.0000 1.0000

Illustration:
From the following data for 10 securities show the workings for optimal portfolio selection using
sharpe's optimization model. Consider risk-free rate as 5% and variance of market returns as 10%.

Security No. Mean Return Beta Unsystematic Risk

1 15 1.0 50
2 17 1.5 40
3 12 1.0 20
4 17 2.0 10
5 11 1.0 40
6 11 1.5 30
7 11 2.0 40
8 7 0.8 16
9 7 1.0 20
10 5.6 0.6 6
Solution:

Security No. Mean Beta Unsystematic Risk Excess Excess returns to beta Rank
Return Returns ratio
1 15 1.0 50 10 10 1
2 17 1.5 40 12 8 2
3 12 1.0 20 7 7 3
4 17 2.0 10 12 6 4
5 11 1.0 40 6 6 5
6 11 1.5 30 6 4 6
7 11 2.0 40 6 3 7
8 7 0.8 16 2 2.5 8
9 7 1.0 20 2 2 9
10 5.6 0.6 6 0.6 1 10
Ranking:
Descending order Ranking
10 1
8 2
7 3
6 4
6 5
4 6
3 7
2.5 8
2 9
1 10
 Short sales not Short sales Standard Lintner's
allowed allowed definition definition

Ra Secur Bet Unsystem Exces Exce 𝑅 −𝑅 𝛽 𝛽 𝑅 −𝑅 𝛽 𝑪𝒊 𝒁𝒊 𝑿𝒊 𝒁𝒊 𝑿𝒊 𝑿𝒊

nk ity a atic Risk s ss 𝜎 𝜎 𝜎 𝜎
No. Retur retur
ns ns to
beta
ratio

1 1 1.0 50 10 10 0.20 0.02 0.2 0.02 2/1.2=1.6667 0.02*4.5489=0.0 0.091/0.3875=0. 0.02*5.4827=0.1 0.1097/0.0177=6. 0.1097/1.3783=
91 2348 097 1977 0.0796

2 2 1.5 40 12 8 0.45 0.056 0.65 0.076 6.5/1.7625=3. 0.0375*2.5489= 0.0956/0.3875= 0.0375*3.4827= 0.1306/0.0177=7. 0.1306/1.3783=
25 25 6879 0.0956 0.2467 0.1306 3785 0.0948

3 3 1.0 20 7 7 0.35 0.05 1.0 0.126 10/2.2625=4.4 0.05*1.5489=0.0 0.0774/0.3875= 0.05*2.4827=0.1 0.1241/0.0177=7. 0.1241/1.3783=
25 199 774 0.1997 241 0113 0.09

4 4 2.0 10 12 6 2.40 0.4 3.4 0.526 34/6.2625=5.4 0.2*0.5489=0.10 0.1098/0.3875= 0.2*1.4827=0.29 0.2965/0.0177=1 0.2965/1.3783=
25 291 98 0.2834 65 6.7514 0.2151

5 5 1.0 40 6 6 0.15 0.025 3.55 0.551 35.5/6.5125=5 0.025*0.5489=0. 0.0137/0.3875= 0.025*1.4827=0. 0.0371/0.0177=2. 0.0371/1.3783=
25 .4511 0137 0.0354 0371 096 0.0269

6 6 1.5 30 6 4 0.30 0.075 3.85 0.626 38.5/7.2625=5 0.05*-0.5173=- -0.0259/0.0177=- -

25 .3012 0.0259 1.4633 0.0259/1.3783=-
0.0188

7 7 2.0 40 6 3 0.30 0.1 4.15 0.726 41.5/8.2625=5 0.05*-1.5173=- -0.0759/0.0177=- -

25 .0227 0.0759 4.2881 0.0759/1.3783=-
0.0551

8 8 0.8 16 2 2.5 0.10 0.04 4.25 0.766 42.5/8.6625=4 0.05*-2.0173=- -0.1009/0.0177=- -

25 .9062 0.1009 5.7006 0.1009/1.3783=-
0.0732

9 9 1.0 20 2 2 0.10 0.05 4.35 0.816 43.5/9.1625=4 0.05*-2.5173=- -0.1259/0.0177=- -

25 .7476 0.1259 7.113 0.1259/1.3783=-
0.0913

10 10 0.6 6 0.6 1 0.06 0.06 4.41 0.876 44.1/9.7625=4 0.1*-3.5173=- -0.3517/0.0177=- -

25 .5173 0.3517 19.8701 0.3517/1.3783=-
0.2552

1.0000 1.0000 1.0000