Finance and Accounting INVESTMENT FINANCE

Project description
This work needs to use Excel solver to calculate:

Finish questions 2 and 5: And show all the calculate steps, No steps no marks:

Question 2. Greg decides to ignore the risk results for cash from Question 1 and assume that cash investments are a reasonable proxy for a risk free asset. He therefore considers Australian

shares and Australian bonds to be the risky asset classes. He uses the results from Question 1 to construct an efficient frontier of risky assets and the optimal risky portfolio.
(a) Graph the pattern of returns and risks for portfolios using a wide range of different combinations of Australian shares and Australian bonds. Plot returns on the vertical axis and risk (ie

standard deviation) on the horizontal axis.
(b) Present the asset weights, expected return, risk and Sharpe ratio for the optimal risky portfolio comprised of Australian shares and Australian bonds.

Question 5. Use Solver to identify a new optimal risky portfolio by including the Barclays Global Macro Fund Accumulation Index with the two traditional risky asset classes. Present the asset

weights, expected return, risk and Sharpe ratio for this new optimal risky portfolio.