Use the means and standard deviations of return for MSFT and TSLA in percent per month that are reported here. mean SD MSFT 2.04 6.61 TSLA 1.43 11.04 Plot four opportunity sets, one for each of the following correlations: • 0.12 (actual monthly correlation) • 1.00 • 0.50 • -1.00 Plot the opportunity sets for each of the four correlations as the weights in MSFT and TSLA vary from -0.20 to 1.20 in increments of at least 0.05. So, MSFT starts with -0.20 and TSLA with 1.20. Then MSFT has -0.15, and TSLA has 1.15. Roll through until MSFT has 1.20, and TSLA has -0.20. The greater the number of portfolios, the nicer your pictures will look. Overlay these four opportunity sets on the same axes so that you can see how changing the correlation changes the opportunity set. Upload a picture of your plot.
Use the means and standard deviations of return for MSFT and TSLA in percent per month that are reported here. mean SD MSFT 2.04 6.61 TSLA 1.43 11.04 Plot four opportunity sets, one for each of the following correlations: • 0.12 (actual monthly correlation) • 1.00 • 0.50 • -1.00 Plot the opportunity sets for each of the four correlations as the weights in MSFT and TSLA vary from -0.20 to 1.20 in increments of at least 0.05. So, MSFT starts with -0.20 and TSLA with 1.20. Then MSFT has -0.15, and TSLA has 1.15. Roll through until MSFT has 1.20, and TSLA has -0.20. The greater the number of portfolios, the nicer your pictures will look. Overlay these four opportunity sets on the same axes so that you can see how changing the correlation changes the opportunity set. Upload a picture of your plot.
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
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Use the means and standard deviations of return for MSFT and TSLA in percent per month that are reported here.
mean
SD
MSFT
2.04
6.61
TSLA
1.43
11.04
Plot four opportunity sets, one for each of the following correlations:
0.12 (actual monthly correlation)
• 1.00
• 0.50
• -1.00
Plot the opportunity sets for each of the four correlations as the weights in MSFT and TSLA vary from -0.20 to 1.20 in
increments of at least 0.05. So, MSFT starts with -0.20 and TSLA with 1.20. Then MSFT has -0.15, and TSLA has 1.15.
Roll through until MSFT has 1.20, and TSLA has -0.20. The greater the number of portfolios, the nicer your pictures will
look.
Overlay these four opportunity sets on the same axes so that you can see how changing the correlation changes the
opportunity set. Upload a picture of your plot.
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