Efficient portfolios and Efficient frontier

Network And Leadership
10/09/2019
HOW COMPANIES COMPUTE THEIR COST OF CAPITAL
10/09/2019

Efficient portfolios and Efficient frontier

You are assigned with five stocks (See the assigned firm name and ticker on BB) and you are expected to build the investment opportunity set using those five stocks. Please collect monthly stock price from FINANCEYAHOO and employ the data range from Jan 1, 2015 to June 30, 2019. Then using the risk-free rate of 0.33%, you are expected to develop the complete portfolio and develop the efficient frontier of these six securities (T-bill and five stocks).

1) Collect monthly stock price data from Jan 1, 2015 to June 30, 2019 (See my example with the sheet entitled Data)

2) Compute monthly stock returns and standard deviation (See my example with the sheet entitled Data)

3) Develop Table of Covariance of these five stocks (See my example with the sheet entitled Data)

4) Find the Minimum-Variance risky portfolio (See my example with the sheet entitled MVP)

5) Find the Efficient Risky portfolios (See my example with the sheet entitled EF , Result, and Graph)

6) Develop the capital market line using T-bill rate of 0.33% (See my example with the sheet entitled MVP, Result, and Graph)

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