Question

	Stock A	Stock B
Mean	8.22%	9.14%
Variance	2.26%	11.64%
Standard Deviation	15.03%	34.12%
Cov(rA,rB)	1.34%
Use the statistics from the above table to calculate portfolio returns, portfolio variance, and portfolio standard deviation for each investment allocation from Cell A9 to A19
Percentage in Stock A	Portfolio Return	Portfolio Variance	Portfolio Standard Deviation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%

Answer 1

Excel formula

	A	B	C				A	B	C
1		Stock A	Stock B			1	Formula	Stock A	Stock B
2	Mean	8.22%	9.14%			2	Mean	8.22%	9.14%
3	Variance	2.26%	11.64%			3	Variance	2.26%	11.64%
4	Standard Deviation	15.03%	34.12%			4	Standard Deviation	15.03%	34.12%
5	Cov(rA,rB)	1.34%				5	Cov(rA,rB)	1.34%
6	Percentage in Stock A	Portfolio Return	Portfolio Variance	Portfolio Standard Deviation		6	Percentage in Stock A	Portfolio Return	Portfolio Variance	Portfolio Standard Deviation
7	0%	9.14%	11.64%	34.12%		7	0%	(=A7*B2+(1-A7)*C2)	(=A7^2*2.26%+(1-A7)*11.64%^2+2*A7*(1-A7)*1.34%)	(=C7^0.5)
8	10%	9.05%	9.69%	31.13%		8	10%	(=A8*B2+(1-A8)*C2)	(=A8^2*2.26%+(1-A8)*11.64%^2+2*A8*(1-A8)*1.34%)	(=C8^0.5)
9	20%	8.96%	7.97%	28.23%		9	20%	(=A9*B2+(1-A9)*C2)	(=A9^2*2.26%+(1-A9)*11.64%^2+2*A9*(1-A9)*1.34%)	(=C9^0.5)
10	30%	8.86%	6.47%	25.44%		10	30%	(=A10*B2+(1-A10)*C2)	(=A10^2*2.26%+(1-A10)*11.64%^2+2*A10*(1-A10)*1.34%)	(=C10^0.5)
11	40%	8.77%	5.20%	22.79%		11	40%	(=A11*B2+(1-A11)*C2)	(=A11^2*2.26%+(1-A11)*11.64%^2+2*A.11*(1-A11)*1.34%)	(=C11^0.5)
12	50%	8.68%	4.15%	20.36%		12	50%	(=A12*B2+(1-A12)*C2)	(=A12^2*2.26%+(1-A12)*11.64%^2+2*A12*(1-A12)*1.34%)	(=C12^0.5)
13	60%	8.59%	3.32%	18.22%		13	60%	(=A13*B2+(1-A13)*C2)	(=A13^2*2.26%+(1-A13)*11.64%^2+2*A13*(1-A13)*1.34%)	(=C13^0.5)
14	70%	8.50%	2.72%	16.49%		14	70%	(=A14*B2+(1-A14)*C2)	(=A14^2*2.26%+(1-A14)*11.64%^2+2*A14*(1-A14)*1.34%)	(=C14^0.5)
15	80%	8.40%	2.34%	15.30%		15	80%	(=A15*B2+(1-A15)*C2)	(=A15^2*2.26%+(1-A15)*11.64%^2+2*A15*(1-A15)*1.34%)	(=C15^0.5)
16	90%	8.31%	2.19%	14.79%		16	90%	(=A16*B2+(1-A16)*C2)	(=A16^2*2.26%+(1-A16)*11.64%^2+2*A16*(1-A16)*1.34%)	(=C16^0.5)
17	100%	8.22%	2.26%	15.03%		17	100%	(=A17*B2+(1-A17)*C2)	(=A17^2*2.26%+(1-A17)*11.64%^2+2*A17*(1-A17)*1.34%)	(=C17^0.5)

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