For the questions use the following averages and covariance

For the questions, use the following averages and covariance matrix. PLEASE HELP ASAP!

Averages

covariance matrix

1.) For a portfolio formed by 30% in asset 2 and 70% in asset 3. Calculate the return on the portfolio.

2.) Calculate the variance of the portfolio formed by 30% in asset 2 and 70% in asset 3.

3.) Using the variance from question 3b, calculate the standard deviation of the portfolio formed by 30% in asset 2 and 70% in asset 3.

4.) Using the average and standard deviation from previous questions, calculate the Sharpe ratio for the portfolio formed by 30% in asset 2 and 70% in asset 3.

5.) Calculate the average of a portfolio formed by 35% in asset 1 and 65% in asset 2.

6.) Calculate the variance of a portfolio formed by 35% in asset 1 and 65% in asset 2.

7.) Using the variance from question 3f, calculate the standard deviation for the portfolio formed by 35% in asset 1 and 65% in asset 2.

8.) Using the average and standard deviation from previous questions, calculate the Sharpe ratio for the portfolio formed by 35% in asset 1 and 65% in asset 2.

9.) Which of the portfolios offer greater return per unit of risk taken?

a. The portfolio formed by 30% in asset 2 and 70% in asset 3
b. The portfolio formed by 35% in asset 1 and 65% in asset 2
c. Both give the same return per unit of risk

Solution

Sol)  

a) For a portfolio formed by 30% in asset 2 and 70% in asset 3. Calculate the return on the portfolio.

Assets 2 3

Returns 0.30 0.70

Expected return= (2*0.30+3*0.70) = 2.7

2) Variance = (2² * 0.30)+(3²  * 0.70) = 7.5

3) variance = Sqrt(variance) = 2.738

5)  average of a portfolio formed by 35% in asset 1 and 65% in asset 2.. Calculate the return on the portfolio.

Assets 1 2

Returns 0.35 0.65

Expected return= (1*0.35+2*0.65) = 1.65