Exp Return Std Devn Investment Weight

Stock A 16 19 60000 0.6

Stock B 18 21 40000 0.4

Exp R on Portfolio 16.8

Corr SD Portfolio
-1 3
-0.8 6.87779034284
-0.6 9.25245913258
-0.4 11.1315767077
-0.2 12.7364045162
0 14.1605084654
0.2 15.4539315386
0.4 16.6471619203
0.6 17.7604054008
0.8 18.8078706929
1 19.8
EXPECTED RETURN

18.5

18

17.5

17

16.5

16

15.5
16.5

16

15.5

15
8.00 10.00 12.00 14.00

STANDARD DE
Weight Sq Variance
0.36 361
0.16 441

Corr=+1 Corr=-1 Corr=-0.60

Weight B Exp Return SD SD SD
0 16 19 19 19.00
0.1 16.2 19.2 15 15.93
0.2 16.4 19.4 11 13.12
0.3 16.6 19.6 7 10.77
0.4 16.8 19.8 3 9.25
0.5 17 20 1 8.99
0.6 17.2 20.2 5 10.08
0.7 17.4 20.4 9 12.17
0.8 17.6 20.6 13 14.83
0.9 17.8 20.8 17 17.82
1 18 21 21 21.00

EFFICIENT FRONTIER

EFFICIENT FRONTIER
12.00 14.00 16.00 18.00 20.00 22.00

STANDARD DEVIATION
EFFICIENT FRONTIER
 Exp Return Std Devn Investment Weight Weight Sq
Stock A 16 19 60000 0.6 0.36
Stock B 18 21 40000 0.4 0.16

Exp R on Portfolio 16.8

Corr Var Portfolio

-1 3
-0.8 6.877790343
-0.6 9.252459133
-0.4 11.13157671
-0.2 12.73640452
0 14.16050847
0.2 15.45393154
0.4 16.64716192
0.6 17.7604054
0.8 18.80787069
1 19.8
Variance
361
441

Corr=+1 Corr=-1 Corr=0.60

Weight B Exp Return SD SD SD
0 16 19 19 19.00
0.1 16.2 19.2 15 15.93
0.2 16.4 19.4 11 13.12
0.3 16.6 19.6 7 10.77
0.4 16.8 19.8 3 9.25
0.5 17 20 1 8.99
0.6 17.2 20.2 5 10.08
0.7 17.4 20.4 9 12.17
0.8 17.6 20.6 13 14.83
0.9 17.8 20.8 17 17.82
1 18 21 21 21.00

Chart Title
18.5

18

17.5

17

16.5

16

15.5

CORR +1 CORR -1 CORR 0.60

15
0 5 10 15
t Title

CORR -1 CORR 0.60

15 20 25