a. Calculate the portfolio variance for seven different portfolios. Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a decimal rounded to 5 places. b. What is the safest attainable portfolio under these restrictions?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Your eccentric Aunt Claudia has left you $50,000 in BP shares plus $50,000 cash. Unfortunately, her will requires that the BP stock not
be sold for one year and the $50,000 cash must be entirely invested in one of the stocks shown below.
BHP Billiton
BP
Siemens
Nestlé
Sony
Sanofi
Agricultural Bank
Standard deviation, %
Agricultural
BHP Billiton BP
1.00
Siemens
Nestlé
Sony Sanofi
Bank
0.44
0.21
-0.05
0.21
0.15
0.24
1.00
0.40
0.24
0.27
0.36
0.27
1.00
0.26
0.33
0.29
0.21
1.00
0.34
0.27
-0.06
1.00
0.27
0.35
1.00
0.17
1.00
26.2
22.8
22.5
13.6
27.6
17.5
25.5
a. Calculate the portfolio variance for seven different portfolios.
Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a
decimal rounded to 5 places.
b. What is the safest attainable portfolio under these restrictions?
Complete this question by entering your answers in the tabs below.
Required A Required B
Calculate the portfolio variance for seven different portfolios.
Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a
decimal rounded to 5 places.
Portfolio Variance
Transcribed Image Text:Help Your eccentric Aunt Claudia has left you $50,000 in BP shares plus $50,000 cash. Unfortunately, her will requires that the BP stock not be sold for one year and the $50,000 cash must be entirely invested in one of the stocks shown below. BHP Billiton BP Siemens Nestlé Sony Sanofi Agricultural Bank Standard deviation, % Agricultural BHP Billiton BP 1.00 Siemens Nestlé Sony Sanofi Bank 0.44 0.21 -0.05 0.21 0.15 0.24 1.00 0.40 0.24 0.27 0.36 0.27 1.00 0.26 0.33 0.29 0.21 1.00 0.34 0.27 -0.06 1.00 0.27 0.35 1.00 0.17 1.00 26.2 22.8 22.5 13.6 27.6 17.5 25.5 a. Calculate the portfolio variance for seven different portfolios. Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a decimal rounded to 5 places. b. What is the safest attainable portfolio under these restrictions? Complete this question by entering your answers in the tabs below. Required A Required B Calculate the portfolio variance for seven different portfolios. Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a decimal rounded to 5 places. Portfolio Variance
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