Good Example Of About The Research: Research Paper
New WowEssays Premium Database!
Find the biggest directory of over
1 million paper examples!
We initiated this paper with the objective of earning $1 million in 20 years down the line with the present value of investment of $250000. At the same time, in part A of this report, we also discussed the importance of diversification for our portfolio which eliminates most of the unsystematic risk leaving our portfolio exposed only to market risk.
Thus, in order to achieve our objective and to create a diversified portfolio, we selected four equity stocks from US stock exchange, namely, Ebay Inc., Apple Inc., Starbucks Inc. and Bank of America. In addition, since we want a guaranteed on our investment, risk free asset was also included in our portfolio that offers 2% return on annual basis. However, in order to find optimal portfolio weights that will multiply our portfolio to $1 million in 25 years and least standard deviation, we used excel solver function.
In order to calculate the optimal weights, we used past 5 year historical closing prices for each stock. The closing prices were then used to calculate monthly returns and standard deviation on annualized basis.
This was followed by a correlation and weighted covariance matrix, which we used to calculate portfolio standard deviation, later to be used while finding optimal weights of each asset in our portfolio.
Conclusion and Recommendation
Using excel solver we found that in order to earn 7.18% return on per annum basis under minimal standard deviation, our portfolio weights should be:
Please remember that this paper is open-access and other students can use it too.
If you need an original paper created exclusively for you, hire one of our brilliant writers!
- Paper Writer
- Write My Paper For Me
- Paper Writing Help
- Buy A Research Paper
- Cheap Research Papers For Sale
- Pay For A Research Paper
- College Essay Writing Services
- College Essays For Sale
- Write My College Essay
- Pay For An Essay
- Research Paper Editor
- Do My Homework For Me
- Buy College Essays
- Do My Essay For Me
- Write My Essay For Me
- Cheap Essay Writer
- Argumentative Essay Writer
- Buy An Essay
- Essay Writing Help
- College Essay Writing Help
- Custom Essay Writing
- Case Study Writing Services
- Case Study Writing Help
- Essay Writing Service