Please answer the questions below utilizing the Accounting workbook attached.
Qu
Please answer the questions below utilizing the Accounting workbook attached.
Question:
1. Based on the regression equation, if the return on Apple is 10%, what is the expected return on
Kellogg? Show calculations.
2. In the Data Table in cells A16:C37, can the proportion invested in Apple exceed 1 in practice,
for the two-stock portfolio? How?
3. From the Data Table in cells A16:C37, what are the mean return and sigma of the least risky
portfolio? What are the proportions invested in Apple and Kellogg for this portfolio?
4. Fully define the following terms: Envelope Portfolio, Envelope, Efficient Portfolio, Efficient
Frontier.
5. Briefly describe and explain the method used to calculate the Variance of Portfolio Y in cell
E16.
6. Briefly describe and explain the method used to calculate the Covariance of portfolios X and
Y in cell B18.
7. Based on the embedded chart in cells D30:G47, explain why x and y cannot be efficient
portfolios.