Graphing the Mean-Variance Efficient Frontier

We shall now plot graphs for our analysis. The x axis would have the portfolio risks against the y axis that contains the portfolio rewards. This graph has been plotted with reference to the table named 8.4 present on page numbered as 232. Few more portfolios were added to make us understand the graph better. Before using it the risk supplemented with reward value of the added portfolio is calculated and entered on to the table. We must now notice the pattern in the graph.

A Shortcut Formula for the Risk of a Portfolio 72

Say if we choose some extra portfolios along with the range of investments that weighs on H within the range 0 to 100%, then subsequently we might conclude with what we get in fig: 8.6. Mean Variance Efficient frontier (abbreviated as MVE frontier) is what the curve obtained is named. The area under the curve gives the finest risk as well as reward portfolio. Ideally there wouldn’t be any portfolio to the North West part of this region.

Graphing the Mean-Variance Efficient Frontier 73

Those portfolios would be having a greater amount of profit for a certain specified risk, and also lesser risk meant for a known probable degree of yield. In case if such region of portfolios existed then this would have eventually be called the MVE frontier. Taking standard deviation on the x axis, we obtain a hyperbola (the name of the nature of the curve).

Graphing the Mean-Variance Efficient Frontier 74

Allowing Shorted Positions

The portfolio on the extreme left of the efficient region is termed as minimum variance range of investments. It is so called as from here a collection of funds with a reduced risk cannot be obtained.

Graphing the Mean-Variance Efficient Frontier 75

It involves considerable amount of algebra so as to find out the risk rate. With reference to the example we considered, the portfolio with a weight valued at 76.191% upon H and also 23.809% upon I. Post the calculation we see that it gets a low risk as low as 8.9%.

Graphing the Mean-Variance Efficient Frontier 76

Links of Previous Main Topic:-

Links of Previous Main Topic:-

Trustpilot

We’re rated Excellent

4.1 out of 5 based on 39 reviews

Please enter the details of your requirements. A price quote will be e-mailed to you as soon as possible.

Join over 200,000+ happy students served our tutors

Take a look at independent reviews to see what users have to say about our homework help service.

4.5/5

overall rating
on LiveChat

96%

of users
recommend service

How It Works

1. Get Price Estimate.
1. Get Price Estimate.

Submit.

Send us your homework. Mention deadline & upload relevant files.

2. Pay Securely.
2. Pay Securely.

Pay.

We accept all major credit cards. Partial payments also accepted.

3. Get Solutions.
3. Get Solutions.

Delivered

Receive error-free, step-by-step solutions in your email.

FAQs

Why use Myhomeworkhelp?

We provide you with the homework help from top experienced experts. Your satisfaction is a priority to us. Get better grades or money-back. It’s that risk-free! Furthermore, everything about you is kept confidential.

How quickly can you help me with my homework?

We take pride in our 24×7 homework help services. Which means, student can approach us anytime, to get help even on short notices. As short as few hours! And yes, we provide complementary plagiarism-free report.

How much will it cost?

We do not have a monthly fees or minimum payments. Each homework task is quoted a unique price. It is based on tutor’s estimate of the time it will take them to complete your task. There are no obligations, and you are free to discuss the price quote with the tutor.
We do accept partial payment (subject to our policy) to start working on your assignment help. You can pay the remaining amount when your task gets completed. No pressure of up-front payment. No hidden costs.

Who are your tutors?

All our experts are highly qualified professionals – holding at least Master’s degree of their respective fields of expertise. We are very selective and choose only the best qualified tutors for each academic subject. All tutor applicants must provide academic transcripts for each degree they hold, and are tested and screened carefully by our staff.

I have privacy concerns. Can I trust you?

Myhomeworkhelp has completed over 250,000 homework help tasks over the last 12 years. But do not take our word for it! See our here and on Trustpilot. Furthermore, everything about you is kept confidential. Your credit card information is not stored anywhere, and use of PayPal relies on their secure payment networks. Your identity, payment and homework help are in safe hands.

Check our video

Our Reviews
Ratings