Question

A.Use Excel to draw a figure showing portfolios of two assets with different correlations.

B.The basic information of two assets:
Asset 1: mean return =0.15, volatility =0.20
Asset 2: mean return =0.25, volatility =0.30
Asset correlation: Use spin bottom to adjust correlations.

Answer 1

To draw a figure showing portfolios of two assets with different correlations using Excel, follow these steps: enter the data, adjust the correlation coefficient, create a scatter plot, plot the portfolios, and label the portfolios.

Step-by-step explanation:

To draw a figure showing portfolios of two assets with different correlations using Excel, follow these steps:

1. Enter the data for the mean returns and volatilities of Asset 1 and Asset 2.
2. Use the spin button to adjust the correlation coefficient between the two assets.
3. Create a scatter plot of the data, with the mean returns on the x-axis and the volatilities on the y-axis.
4. Plot the portfolios on the scatter plot by calculating the weightings of the two assets and overlaying them on the plot.
5. Label the portfolios and include a legend to indicate which asset is represented by each portfolio.