Part 1 (Excel): Assume you want to invest in a market with two risky assets and the risk-free rate. The numbers are in the below table: Return Risk Correlati on Risky Asset 1 12.50% 25.50% Portfolio 1 Portfolio 2 Portfolio 3 Portfolio 4 Portfolio 5 Portfolio 6 Portfolio 7 Portfolio 8 0.65 It is possible to choose from eight different portfolios of risky assets, with weights: 0% 20% Risky Asset 2 Weight (Risky Asset 1) -20% 40% 60% 80% 7.50% 15.50% 100% 120% Risk-free Asset 1.25% Weight (Risky Asset 2) 120% 100% 80% 60% 40% 20% 0% -20% Show how it is possible to select the best risky portfolio, given the information you have. Solve this part by doing the calculations on the Excel file and write the answer in Section 2 your comments. If you want, you can help yourself with graphs to clarify your answers.

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Portfolio Management

Portfolio management is the process by which an investor decides that how the person will invest in a variety of assets in order to get a desired return in the future. A portfolio means a pool of assets that includes securities, bonds, and other investment instruments which helps in risk minimization of the money that has been invested. In other words, it can be said that a portfolio means a combination of assets in which an investor decides to invest their money in order to get a lump sum return in the future or even a series of cash flow that the person is expecting at the end of their job life.